PNG Forest Authority: Increase in log export levy good for Papua New Guinea

The increase in log export tax is good for the forest industry.

It is a gradual transition as eventually by 2025 there would be reduction by 50 per cent on round log exports and ideally logging companies will not pay export levy.

PNG Forest Authority Managing Director Tunou Sabuin said this yesterday explaining the changes in the forest sector.

He accounted the forest sector has gone through several changes and among them was the round log export policy, then the sustainable forest management policy and recently it was the downstream processing policy.

He said as captured in the Medium Term Development Plan III the country should reduce round log export by 50 per cent and venture into downstream processing by 2025.

To achieve this it must reduce round log export by 10 per cent each year starting in 2020.

“It’s gone to the board already and the board will meet on 28 or 29 of this month, will make a decision on downstream processing and reforestation and then the minister can sponsor a paper to NEC to finally approve,” Sabuin said.

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He said while they would monitor the implementation of the new tax policy which should be enforced by PNG Customs once a memo is sent out, they encouraged industry players to see it as an advantage leading up to the implementation of downstream processing policy.

It is also a time that the logging companies show how genuine their investments are.

Sabuin said they have received three “force majeure” notice from loggers and PNG Forest Authority lawyers would have a look at them.

A force majeure is unforeseeable circumstances that prevent someone from fulfilling a contract.

“It’s a force majeure against a policy of a government,” he said smiling.

Aside from the tax amendments he said they have worked on legal timber policy standard as well.

It is about verifying that timbers from PNG are from sustainably managed forests and having that would allow us to export to Europe, Australia and the United States.

The PNG Forest Authority board has deliberated on this and it would go before the NEC for approval.

Logging truck

Logging truck

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