The National Government has reduced the Log Export Tax in the 2024 National Budget to address concerns pertaining to the performance of the country’s forestry sector.
According to the Treasurer, Mr. Ian Ling Stuckey, the State lifted the Log Export Tax in the 2023 Budget to a whopping 70% from the previous 50%, saying that the increase was to raise additional revenue to support the establishment of the Biodiversity and Climate Change Fund and to strengthen downstream processing policy of unprocessed logs.
However, in the 2024 Budget, the Log Export Tax is expected to be reduced back to 50%. The reason being that the forestry sector has been experiencing low demand in export market for logs during the year, the bad weather affecting production and the current unfavorable taxation regime.
“After close consultation with the forestry sector on the impact of the current log export tax, it was agreed to introduce a regime which is lower than the current log export tax regime,” stated the Treasurer.
“It was suggested that the current regime provides an unfriendly business environment to support the logging industry to go down the path of downstream processing.”
Therefore, implementing the regime will allow the forestry sector to plan and develop capacity for downstream processing in consistent with the government’s objective to ban export of unprocessed logs by 2025; hence, focusing on downstream processing.
This new measure will come into effective on the 01st of January 2024.