In tropical forest management with a stated goal of sustainable production, increasing or refining forest taxation may serve the fiscal objectives of the owner but is unlikely to encourage maintenance of the underlying asset. There is no happy confluence of fiscal, economic and environmental virtues in a single tax instrument. Taxation cannot be an elegant substitute for traditional regulation, itself an imperfect instrument. In any event, policy instruments need to match the management regime socially most appropriate for a given type of forest land. Improved taxation may very well have a role to play in some management regimes but not in those that aim at sustaining the supply of tropical forest services. Different classes of incentives and disincentives are needed there. Early experience with non-tax market mechanisms that facilitate oversight by state while rewarding responsible management by lessees (e.g. performance guarantee bond) ought to be evaluated and obstacles to such instruments' introduction studied. Better understanding of logging's environmental repercussions is much welcome and needs to be further encouraged. Conventional taxation recommendations are in conflict with recent calls for an environmental subsidy via payment for avoided deforestation.
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1 June 2010
Taxation of Tropical Forests: Search for Generalizations After Half a Century of Trying
I. Ruzicka
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International Forestry Review
Vol. 12 • No. 2
June 2010
Vol. 12 • No. 2
June 2010
avoided deforestation
forest depletion
forest taxation
performance guarantee bond
rent