Taxing times
The 15 euros tariffs per cubic meter of timber will continue, despite Finnish forest industry has reiterated calls for tariffs to be removed completely.
Meeting the forest producers in St. Petersburg Sunday, Prime Minister Vladimir Putin announced that Russia is to continue its moratorium on wood export tariffs, reports YLE News.
However, an earlier announced increase in the export duty on timber will be delayed. - We will extend the moratorium on raising the export duty on raw timber to 2010, Putin said, adding that the freeze also may be extended into 2011, reports the Associated Press.
Russia implemented the increased tariffs as a means to procure additional western investment in the country’s forest sector.
Finland’s Prime Minister Matti Vanhanen urged Russia to cancel the duty altogheter. Vanhanen said he believes that the higher duty will be harmful for the timber processing industry and Russian-Finnish ties.At the same time, representatives from Russia’s forestry industry claims that its business is rotting, writes RusBuisiness News.
Andrey Dobrachev, a Professor at the Urals Forestry University, says to RusBusiness news that the situation of the Russian timber processors is rather difficult: round timber to Finland is shipped from Brazil, since export of round timber from Russia is prohibited. Timber processing has achieved the best possible levels of productivity and quality but this is not enough to pay for the imported machinery. It would only be possible to rectify the economy with further investment into logistics and the establishment a fully fledged cluster but finding money at the time of crisis far from easy. The result is that the timber industry is dreaming of USSR style production volumes while timber rots standing.
A reasonable question arises: why do the authorities, seeing the desperate situation of the sector not stimulate the demand in the domestic market? It is very hard to answer this because, regardless of practically zero profitability Russian plants are continuing to ship timber abroad, writes RusBuisiness News in an analytic article about the problems in Russia’s Forestry Industry.
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