Govt increases forest royalties by 10 percent<\/p>\n
JAKARTA (JP): The government increased forest royalties by 10
\npercent yesterday after taking into account the favorable prices
\nof log and plywood on the international market.<\/p>\n
Minister of Forestry Djamaludin Suryohadikusumo said yesterday
\nthe new royalties, stipulated under Ministerial Decree No. 172,
\n1997, would take effect today and be in force until March 31,
\n1998.<\/p>\n
Djamaludin said log and plywood prices on the international
\nmarket were a high US$500 per cubic meter from about $350 several
\nmonths ago.<\/p>\n
\"I think this gives us reasonable cause for asking businesses
\nto set aside part of their profits to pay higher royalties,\" he
\ntold a press conference.<\/p>\n
He was accompanied yesterday by executive chairman of the
\nAssociation of Indonesian Wood Panel Producers, Tjipto
\nWigjoprajitno, and executive chairman of the Association of
\nIndonesian Forest Concessionaires, Hendro Prastowo.<\/p>\n
Djamaludin said, however, royalties on wood chips, timber
\nderived from industrial timber estates and forest byproducts --
\notherwise known as nontimber products -- would not be increased.<\/p>\n
\"Prices of pulp, which is made from wood chips and waste
\ntimber, fluctuates periodically on the market ... They reached
\n$900 a ton several months ago but then fell to only $350 a ton
\nand have not increased since,\" Djamaludin said, explaining why
\nroyalties for wood chips remained the same.<\/p>\n
He said the government also intended to encourage the
\nestablishment of timber estates as a source of raw material for
\nindustries and thus decided against increasing royalties on
\ntimber estate products.<\/p>\n
He said royalties on forest byproducts or nonforest products
\nwere not increased because products in this category were mostly
\nprocessed by small businesses and used for domestic consumption.<\/p>\n
Nontimber products include rattan, turpentine, birds nest,
\nbark, bamboo and honey.<\/p>\n
Forest royalties are among the fees that forest
\nconcessionaires must pay in order to operate.<\/p>\n
Together with reforestation funds, they are designed to
\nguarantee that concessionaires manage their forests in an
\nenvironmentally sustainable manner.<\/p>\n
Djamaludin said the government did not increase reforestation
\nfunds as the funds would soon be incorporated as government
\nnontax revenue. The bill on nontax revenue is currently being
\ndeliberated by the House of Representatives and is due for
\napproval later this year.<\/p>\n
The new royalties for meranti timber (Shorea), which is mostly
\nused for plywood, now range between Rp 23,000 and Rp 28,500 per
\ncubic meter.<\/p>\n
Royalties for ebony and sandalwood now range between Rp
\n280,200 and Rp 339,500 per ton and for teakwood between Rp 8,500
\nand Rp 32,700 per cubic meter, depending on log diameter.<\/p>\n
Djamaludin said the government expected to increase its
\nrevenue from forest royalties by Rp 50 billion ($20.8 million) as
\na result of the royalty increase.<\/p>\n
Forest royalties collected in the 1996\/1997 fiscal year which
\nended yesterday stood at Rp 527 billion, up from Rp 430 billion
\nin 1995\/1996.<\/p>\n
Forest royalties currently make up about 6 percent of the
\nprices of forest products.<\/p>\n
Their amount depends on the type of product and its origin,
\nmeaning that the same species of timber may be subject to a
\nsmaller royalty if it came from a region with poor infrastructure
\nthan if it came from an area with sound roads and transportation
\nfacilities.<\/p>\n
The government usually reviews the royalties after comparing
\nprices on the international and domestic market every six months.<\/p>\n
The government last raised the mandatory royalties by 10
\npercent last October to reflect price rises on the world market
\nand inflation.<\/p>\n
The government during the January to December period of last
\nyear managed to collect Rp 592.78 billion ($247 million) in
\nforest royalties, up from Rp 539.33 billion in 1995 and Rp 428
\nbillion in 1994.<\/p>\n
The provinces which contributed the most during the 1995\/1996
\nfiscal year were Central Kalimantan (Rp 95 billion), East
\nKalimantan (Rp 87 billion), Riau (Rp 39 billion), West Kalimantan
\n(Rp 32 billion) and Irian Jaya (Rp 28 billion).<\/p>\n
The government decided not to raise the royalties during the
\nApril to September period of last year because of unfavorable
\nplywood prices at that time.<\/p>\n
Forty-five percent of the forest royalties are currently paid
\nto local administrations for local forest development, 20 percent
\nas land tax, 15 percent to the forestry ministry's central office
\nfor national forest development and 20 percent to the state
\ntreasurer. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-increases-forest-royalties-by-10-percent-1447893297",
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