Finance Law: Controversy around the forest tax

Members of the Network of Parliamentarians for the Sustainable Management of Forest Ecosystems of Central Africa (Repar), have made a plea to the government for reintroduction in the 2016 Law that, 10% quota should be reserved for village communities.

The situation angered municipalities.The deletion in the 2015 Finance Act states that, a share is reserved for neighboring village communities of forests used in the distribution of forest royalties.

According to Repar, this creates a shortfall in regional and local authorities, who are from the beginning of the year unable to implement the development programs initiated by the grassroots.

Yet,this shortfall for these municipalities, forestry is the main source of income worth FCFA billions.

Between 2000 and 2011, 118 of these municipalities have received FCFA 63.7 billion. FCFA 50.4 billion of this amount went to the towns, and 13.3 in project financing.

According to Article 3 of the Joint meeting by the Ministries of Finance (MINFI), Territorial Administration and Decentralisation (MINATD) and Forestry and Wildlife (MINFOF) of June 26, 2012, this proportionate share represents 10% of half the tax.

The ire of mayors is as a result of the circular signed on 28 January by the
Director General of Taxation. It specifies the rules for the application of the tax provisions of the 2015Finance Act and gives new distribution grid of timber royalty, or at least the portion reserved for municipalities. But the problem is that it increases 2.2% on the quotas for the municipalities and Feicom, unlike the 20% received prior to 2015.

Likewise, it grants the remaining 5% to support the recovery, so the tax officials at the expense of 10% reserved for local populations of exploited forests.

This new distribution is not only against the forestry law of 1974, but it does not equally respect the decree of the Prime Minister in July 2014, laying down the modalities centralization, distribution and transfer of the product subject to municipal taxes Equalization.

Repar added, that this network requests the Government to be in a more explicit part in this law, the distribution of 50% of the forest royalty reserved in the Councils.

In order to make peace, the government has to deduct 5% of the support for the recovery of the share for the state. Finally, it requires the government to return within the next finance bill 10% of the forest royalties reserved for local residents.