Forestry Taxation in Africa: The Case of Liberia

Author/Editor:

Saji Thomas ; Arnim Schwidrowski

Publication Date:

August 1, 2005

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Countries generally tax the forestry sector to achieve the twin objectives of revenue maximization and sustainability of logging levels. In an ideal world of perfect markets and information, auctions would be the best instrument to determine the price of extraction rights. However, a number of factors-including a lack of information on the forest resources under consideration, uncertainties as to the stability of property rights over time, and a lack of access to credit-have limited the use of auctions so far, particularly in low-income countries. To establish transparency of the forestry sector's financial flows, this paper discusses a radical simplification of Liberia's current timber tax structure, including a proposal to reduce the sector's current tax system to two instruments, an area tax and an export tax.

Series:

Working Paper No. 2005/156

Subject:

Agroindustries Economic sectors Environment Exports Forestry tax International trade Natural resources Tariffs Tax incentives Taxes

English

Publication Date:

August 1, 2005

ISBN/ISSN:

9781451861754/1018-5941

Stock No:

WPIEA2005156

Pages:

27

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