Indonesia to Impose Heavy Taxes on Forestry Firms
4/8/99
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Title: Indonesia to Impose Heavy Taxes on Forestry Firms
Source: Reuters Limited
Status: Copyright 1999, contact source for permission to reprint
Date: April 8, 1999
JAKARTA - Indonesia's Forestry Minister Muslimin Nasution said the
government would impose heavy taxes on forestry companies in a move
to reduce their holdings on large forests.
"The president has agreed to impose progessive taxes on forestry
companies, who hold large hectarages of forest," he told reporters
after a cabinet meeting headed by President B.J. Habibie.
"The decision will affect the holders of rights on more than 3.5
million hectares of forest," Nasution said. "This decision is aimed
at reducing the holdings of forest by several companies. We can't
break the rules but we can impose taxes. My ministry will calculate
how much the tax will be.
"We expect the firms will give up holding large areas of forest," he
said.
Nasution said the government would give potential small scale firms
and cooperatives living in forest areas licences to become forestry
operators.
Conglomerates currently hold most of Indonesia's 51.5 million
forestry concessions, with Barito Pacific among the largest, holding
around 2.7 million hectares.
Forest fires hit Indonesia in 1997 and 1998, particularly in Sumatra
and Borneo, causing a regional environmental disaster and enveloping
much of southeast Asia in smog for weeks. The World Wide Fund for
Nature (WWF) said the fires affected five million hectares, mostly
forest and small scale plantations.
Environmental activists blamed the fires partly on conglomerates,
saying they were conducting unsustainable forest management and were
only interested in profits.
Nasution said his ministry was still investigating alleged corruption
in the forestry industry.
"We are still working to find corruption in the forestry system
licences. We believe there is a lot of corruption in forestry. The
president has ordered forestry to be put in order without any
exceptions," Nasution said.