Timber export tax proposed
FINANCE minister Calle Schlettwein has said he is working on a new timber export tax regime to punish and discourage the shipping out of Namibia’s rare wood.
Schlettwein made these comments on Sunday when asked by The Namibian what his ministry was doing to curb the controversial exports of timber, which appear to be illegal.
He said the ministry will introduce a new tax to punish those who want to ship out the rare wood that is currently being sold for peanuts to China.
“What we will do is to put a serious tax to punish exports of raw material like timber,” he stressed.
Namibia does not have an export tax on timber. Schlettwein announced during his budget speech this year that he will introduce a 15% export tax on timber products.
He, however, added that they are worried that timber exporters – mainly Chinese – are mixing Namibian wood with timber from countries like Zambia.
“It’s a problem,” he said, adding that the Chinese embassy had offered to help by informing their citizens about this problematic trend.
Schlettwein reiterated that the ongoing harvesting of rosewood trees is unsustainable because the country is selling its resources cheaply for short-term gain.
“These trees are a couple of hundred years old. If you cut them down, that forest is gone. They take years to grow back. From an economic point of view, it is not rewarding at all. We are giving away our resources for a song,” the minister said.
It’s unclear why Schlettwein did not act fast when news about the increasing sale of timber to China broke. His ministry runs the customs department which collects taxes, especially on goods leaving or entering the country.
The minister, however, said the government needs to push for value addition to produce “high-quality products” from the timber harvested in northern Namibia.
There is also an ongoing investigation into the export of timber that had been impounded some years ago, he noted.
It is not clear whether the planned tax would effectively legalise the exporting of timber, which has been described as illegal.
Environment minister Pohamba Shifeta said earlier this month that the law prohibits the exporting of unprocessed or semi-processed Namibian timber, unless it is for research or educational purposes.
To Shifeta, ignoring the law is further proof that timber traders and state officials have broken yet another law meant to protect Namibia’s rare trees.
“It was completely illegal, not only in terms of the Environmental Management Act No 7 of 2007 that they did not have environmental clearance certificates, but also in terms of the Forestry Act No 12 of 2002 and its regulations,” he stated.
News about the proposed tax comes at a time when sources say an investigation into the harvesting of timber in Kavango East concluded that there was illegal timber logging.
The investigation, commissioned last month, was concluded this month.
The Namibian understands that the report, compiled by officials from the ministries of environment and agriculture, suggested that the timber confiscated by the government should be sent to a factory inside the country to be processed into usable products.
Agriculture’s executive director, Percy Misika, said Cabinet had decided to explore and encourage investors to set up a factory in north-eastern Namibia to harvest timber.
He declined to comment on the investigation which was completed this month. He, however, said executive directors from other ministries had submitted a joint statement on this issue to their respective ministers. Misika added that the ministers met yesterday, and will compile a report and recommendations to prime minister Saara Kuugongelwa-Amadhila.
Asked whether the government will set up a timber factory, he said that responsibility would fall under the trade and industry ministry.
The Namibian reported last month that despite a regulation prohibiting the exporting of Namibian timber – unless it is for research or education – exports of the timber to China had increased nearly tenfold – from 22 truckloads in 2015 to 208 trucks in the first two months of this year.
In total, 3 200 tonnes of Namibian timber were exported to China in 2018. This figure doubled to 7 500 tonnes between January and February this year.
This figure could be higher if statistics of the timber exported in March this year is added since this was the deadline month for transporting timber.