Forestry Taxation in Africa: The Case of Liberia

27 Pages Posted: 3 Mar 2006

See all articles by Arnim Schwidrowski

Arnim Schwidrowski

International Monetary Fund (IMF)

Saji Thomas

International Monetary Fund (IMF)

Date Written: August 2005

Abstract

Countries generally tax the forestry sector to achieve the twin objectives of revenue maximization and sustainability of logging levels. In an ideal world of perfect markets and information, auctions would be the best instrument to determine the price of extraction rights. However, a number of factors - including a lack of information on the forest resources under consideration, uncertainties as to the stability of property rights over time, and a lack of access to credit - have limited the use of auctions so far, particularly in low-income countries. To establish transparency of the forestry sector's financial flows, this paper discusses a radical simplification of Liberia's current timber tax structure, including a proposal to reduce the sector's current tax system to two instruments, an area tax and an export tax.

Keywords: forestry, taxation, Africa, Liberia

JEL Classification: H20, Q23, O55

Suggested Citation

Schwidrowski, Arnim and Thomas, Saji, Forestry Taxation in Africa: The Case of Liberia (August 2005). IMF Working Paper No. 05/156, Available at SSRN: https://ssrn.com/abstract=888025

Arnim Schwidrowski (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Saji Thomas

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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