Government to revise timber royalties
JAKARTA (JP): The government announced on Saturday the new floor prices used to calculate the royalties imposed on the country's timber companies.
Minister of Industry and Trade Rahardi Ramelan said the new floor prices based on wood prices during the second half of 1998 and their trends in the first half of this year would be effective for the period from Jan. 1 to June 30.
The floor prices of big diameter logs such as 'meranti' from Sumatra, Kalimantan, Sulawesi and Maluku are set at Rp 640,000 (US$75.3) per cubic meter, while those from Irian Jaya, East and West Nusa Tenggara, Bali and East Timor are Rp 530,000 per cubic meter.
Mixed wood from Sumatra, Kalimantan, Sulawesi and Maluku is fixed at Rp 360,000 per cubic meter while that from Irian Jaya, East and West Nusa Tenggara is Rp 265,000 per cubic meter.
The floor price of sandalwood is set at Rp 7 million per ton, other fancy wood logs at Rp 905,000 per cubic meter, while teak logs are floor-priced at between Rp 192,000 per cubic meter and Rp 764,000 per cubic meter, depending on diameter.
The payment of royalties, officially called resource royalty provision, is based on the wood's standard selling prices, which are determined periodically by the Ministry of Industry and Trade after taking into account wood prices on the domestic and international markets.
The royalties are set in a range of one to 6 percent of the wood floor prices.
The royalty which should be paid to the government from the sales of big diameter logs such as 'meranti' and mixed tropical wood from Sumatra, Kalimantan, Sulawesi, Maluku, Irian Jaya, East Nusa Tenggara and East Timor is set at 6 percent per cubic meter.
A 6 percent royalty per cubic meter is also imposed on fancy woods, such as teak, ebony, and sandalwood. And it is also imposed on every ton of large diameter rattan, while a zero- percent tax will be charged on small-diameter rattan.
The government also imposes a 1 percent royalty for every cubic meter of wood with a diameter less than 30 centimeters.
The government charges a 5-percent royalty on wood from industrial forests, such as pine, acacia, balsa and sengon.
In addition to resource royalty provisions and concession fees, timber companies are still required to pay reforestation funds, to encourage them to manage forests in an environmentally sustainable manner.
The government expected to collect Rp 566 billion from resource royalty provisions in the current 1998/1999 fiscal year. (gis)