Forest Tax Research Articles

Global Gain, but Local Loss—National Park and Municipal Revenues in Poland

The paper analyzes the problem of stagnation in the creation of new national parks in Poland, identifying key barriers and proposing solutions. The background to the study refers to the role of national parks in nature conservation, but at the same time highlights the problem of the limited development of the park network in Poland, which remains at 1.05% of the country’s area—well below the EU average. The main obstacles identified by the author are the resistance of local governments due to the reduction in forest tax revenues and the differences in salaries between employees of national parks and state forests. Research methods included legal and economic analysis and a review of the literature on national park management. The results indicate that the problem can be solved by adequate financial compensation to local communities and the introduction of a co-management model that integrates the interests of local governments and parks. The article suggests that a change in the approach of the government administration and a more participatory management model can help to break the stagnation and increase the number of national parks, which is relevant not only for Poland but also for other countries struggling with similar challenges.

Peculiarities of legal regulation of the tax system of local self-government bodies in the Republic of Poland

The article is devoted to the analysis of the peculiarities of the legal regulation of the tax system of local self-government bodies in the Republic of Poland.
 It is shown that the modern system of local taxes began to form in the 90s of the last century, together with the restoration of the institution of local self-government. Despite the constitutional enshrinement of the right of all local self-government bodies to determine the amount of local taxes, ordinary legislation grants tax powers exclusively to the lowest link in the three-level system - the commune. Financing of the functions and powers of local self-government bodies of voivodships and poviats takes place through deductions from national taxes and fees. The author focuses on the existence of a distinction between the terms "local taxes” and "taxes of local self-government bodies” in the Polish doctrine of tax law. Local taxes are taxes that, by virtue of the law, are a permanent, indefinite and exclusive source of income for local budgets. Meanwhile, taxes of local self-government bodies are payments in respect of which local self­government bodies have tax powers. In light of the accepted criteria, for example, inheritance and gift tax is a local tax, but cannot be called a tax of local governments. Funds from this tax are fully credited to the budget of the territorial community, but local self-government bodies do not have tax authority over it. The list of local taxes is contained in the Law "On Local Taxes and Fees”. However, in reality, this list is incomplete and does not include a number of local taxes that are regulated by other legislative acts. In general, the list of local taxes is quite voluminous, in which only real estate tax, vehicle tax, forest tax and agricultural tax belong to the taxes of local self-government bodies. They meet the formal and material criteria that characterize the "own income” of local self-government units, while others only meet the formal criteria.

Optimization of forestry indirect and direct taxation in sustainable development conditions

The indirect and direct taxation mechanism is examined in the article. It is determined that a significant place in total income part of the Ukraine’s state budget is occupied by indirect taxes, but the larger share falls on direct taxes. The structure and dynamics of indirect taxes in budget of Ukraine were carried out. The biggest disadvantages of the taxation existing system are established. It is suggested to add new principles to the legislative principles of taxation, their compliance will strengthen the country’s tax system. The indicators of the tax burden and profitability of three business forestry entities are analyzed. It was established the existence of a closeness between the tax burden and the financial results of forestry companies via using the coefficients of correlation and determination. Ways to improve indirect and direct taxation in Ukraine in terms of some indirect taxes are proposed (VAT, excise tax and toll). The problems of applying the environmental tax in Ukraine are identified and ways to eliminate them are suggested. The new formula for calculating the single forest tax is developed. The advantages of its use are substantiated.

Legible Landscapes: Incentivizing Forest Knowledge and Action in Southern Ontario

Abstract Background This paper traces the changing dynamics of forest management on privately owned land in southern Ontario, Canada, using the conceptual lens of state legibility to highlight how incentive programs are creating new ways of seeing and engaging in stewardship. Specifically, the Managed Forest Tax Incentive Program (MFTIP) and its corresponding Managed Forest Plan are investigated as a means through which a diversified field of knowledge has been activated to enable climate-conscious adaptive stewardship across the region. Methods This case study uses a qualitative approach, incorporating document analysis, semi-structured interviews, and direct observation. Similar patterns and relationships within and across sites are identified to build theory and shed light on the socio-ecological context of private forest management. Results Set within southern Ontario’s history of forest management and the rise of neoliberal environmental governance, this paper contributes theoretically to scholarship on state legibility. The results illustrate a shift in stewardship on private lands through a rescaling of management responsibility that embraces different perspectives and builds place-based practical knowledge of forest systems. By mapping and building knowledge networks, diverse approaches to management have proliferated at the local and regional levels. These approaches have been influenced by previous management experience, different professional backgrounds, knowledge of participants, and the motivation of landowners to engage in active stewardship. Conclusion The process of developing a management plan plays a key role in making landscapes legible to all stakeholders. The document also serves as an instrument of the state to build private landowners’ and forest consultants’ knowledge and capacity. This has set in motion a socio-ecological landscape strategy to address encroachment, invasive species, and climatic challenges in this increasingly urbanizing region.

THE IMPORTANCE OF THE ECONOMIC FUNCTION OF FORESTS ON THE EXAMPLE OF THE STATE FORESTS IN THE CONTEXT OF THE 2030 SUSTAINABLE DEVELOPMENT GOALS

The article shows the economic function of the State Forests in the context of sustainable development and the implementation of the 2030 Agenda goals. This theoretical and review article was developed on the basis of the literature analysis supported by statistical summaries illustrating the subject matter. The State Forest manages almost 77% of forest resources in Poland. Forest management conducted by the State Forests is based on a multifunctional model, resulting from the need to distinguish all natural functions performed by forests: ecological (protective), economic and social function. Forest management is conducted in a sustainable manner, ensuring the renewal of forest resources and the durability of natural processes, while ensuring the possibility of drawing financial benefits from resource management. The State Forests by employing over 25,000 people with an average salary higher than the average salary in the national economy by almost 60% (2021), transferring to the state budget almost 3 billion PLN in various taxes and by supplying local budgets with a forest tax with a total value of over 235 million PLN (2021).

Environmental Taxes in Poland and South Korea – Sharing Experiences

The article aimed to identify, to assess the environmental taxes in Poland and South Korea, and to indicate a potential area of cooperation – an exchange of experience on environmental taxes. The analysis covered data from the period 2000-2020. However, in some parts, due to the availability of data, the investigation was completed in 2014 or 2019. The research methods employed were a critical analysis of domestic and foreign literature, an analysis of Polish and Korean legal acts underpinning environmental taxes in a comparative approach, and an analysis of OECD data using simple statistical methods and benchmarking elements. Four environmental taxes were identified in Poland: an excise tax on types of products deemed harmful to the environment, a Vehicle Tax, a Forest Tax and an Agricultural Tax. In South Korea, three taxes were included: Individual Consumption Tax, Automobile Tax and Transportation, Energy, Environmental Tax. Environmental taxes in Poland and South Korea were evaluated positively, taking the fiscal and informative functions as criteria. However, it was shown that an exchange of experience would be desirable, particularly in the area of improving the implementation of the stimulating function of taxes that related to air pollution.

Status and Trends in Forest Environment Transfer Tax and Information Interface between Prefectures and Municipalities: Multi-Level Governance of Forest Management in 47 Japanese Prefectures

In 2019, Japan introduced a national forest-environment-transfer tax (FETT). Prefectural and municipal governments receive tax revenue. Currently, 37 prefectures in Japan have prefectural forest taxes, and the prefectures need to demarcate how their own taxes and the national tax are being used. This study analyzed the overall use trends of national tax, which is for supporting municipal forest management, and review the status of prefectural forest environmental taxes. National tax was primarily applied to organizing the information of forests and their owners. The main components of support by prefectures to municipalities were support to questionnaires for private forest owners, other technical supports, securing successors, and training successors. Regarding the prefectural taxes, forest types and policies, which were implemented by the taxes, were reviewed in 18 prefectures. The differentiation of the tax uses of prefectural tax and FETT as a national tax was implemented based on the types of forest and supporting activities, and the spatial scales of forest management. The formation of FETT does not necessarily accompany the flexible assignment of jurisdictions and functions of multi-level governance, with potentially limiting impacts so far. This study could concretely conclude with the demand for participatory social learning toward sustainable forest policymaking and implementations of payment for ecosystem services in forests at the multi-levels of the national government, prefectures, and municipalities.

Decriminalization of forest resources through forest tax

Decriminalization of forest resources through forest tax

The determinants of forest land prices

The authors discuss the peculiarities of price formation for forest land as a renewable plant natural resource. Forest plots are regarded as a forest resource that can be used in two ways: as a natural object and as a source of wood raw materials. The absolute forest rent for forest areas with standing trees, adjusted for economic, environmental, and social factors, serves as the pricing basis. The authors propose creating differentiated regional price lists for forest plots and methodological approaches to pricing forest plots with different types of forest use to substantiate the forest tax and tax base.

Models Explaining the Levels of Forest Environmental Taxes and Other PES Schemes in Japan

Between 2003 and April 2016, 37 of 47 prefectures (i.e., sub-national local governmental units) introduced forest environmental taxes—local payment for environmental services (PES) schemes. These introductions are unique historical natural experiments, in which local governments made their own political decisions considering multiple factors. This study empirically evaluates models that explain normalized expenditures from forest environmental taxes as well as other PES schemes (subsidies for enhancing forests’ and mountain villages’ multifunction, and green donation) and traditional forestry budgets for Japan’s 47 prefectures based on the median voter model. Results demonstrate that the median voter model can particularly explain forest environmental taxes and forestry budgets. Specifically, the past incidence of droughts and landslides is positively correlated with the levels of forest environmental taxes. The higher the number of municipalities in a prefecture, the lower the amount of forest environmental tax spent on forests. Moreover, the number of forest volunteering groups, possibly an indicator of social capital in the forest sectors, had strong positive correlations with the levels of forest environmental taxes and forestry budgets. Other PES schemes and forestry budgets had unique patterns of correlations with the examined factors.

The importance of municipal tax policy in shaping forest tax revenues in Poland

Motivation: The subject of interest presented in this study is the problem of forest tax and the respective municipal revenues in the context of the principle of financial independence. It is manifested in the ability of implementing own tax policy, i.e. exerting purposeful influence on the structural elements of taxes by the local authorities aimed at using their functions in an optimal manner. Forest tax as a typical local tax may contribute towards implementing this principle in practice.Aim: The study presents the legal structure of forest tax, primarily in the context of the powers granted to municipalities in terms of fiscal power. The main objective of the study is to assess the impact of tax policy implemented by municipalities on the amount and importance of forest tax revenues in the financing structure.Results: Comparing to other revenue categories, the fiscal efficiency of tax and its importance in the municipal financing structure remain small (approx. 0.15% of total revenues) and they depend directly on the tax base. It is a derivative of the forest area being the tax base and the structure considered in terms of statutory exemptions and the method of determining the tax rate. Municipal tax policy regarding the forest tax is characterised by a very small activity. A more liberal tax policy is usually associated with a lower tax importance in a municipality, which demonstrates its fiscal stance. Generally, this policy has a marginal impact on the importance of forest tax in the structure of municipal finance.

Forest Tax Payment Responsibility from the Forest Service Footprint Perspective.

It has been observed that market failure has hampered the development of sustainable forest ecosystem services such as CO2 absorption and fixation, water retention, and biodiversity. One of the reasons for this is that the link between forest land use and the beneficiaries of that use has not been widely recognized or clearly established. To address this problem, we conducted a footprint analysis to clarify the linkage between Japanese taxpayers as the beneficiaries of forest land use and the use of tax revenue and monetary donations for forest management. This study focuses on how the current forest tax collected from Japanese taxpayers (63 billion Japanese yen) could be allocated more fairly. The question of whether the collected taxes are sufficient is left for another time. At the core of our analysis, we examined the carbon footprint and established a linkage between the origins of CO2 emissions in Japan and their destinations by using a subnational multiregional input-output database and building a base table focused on various land use types and subnational regions at the municipality level. By clarifying these linkages and enhancing their transparency, we provide a basis for developing alternative financing schemes involving both taxation and taxpayer donations in support of forest management activities and protection of biodiverse habitats.

Carbon and market effects of U.S. forest taxation policy

We use a dynamic global forest model to examine how U.S. tax reform could influence forest stocks and carbon sequestration. Scenario analysis estimates several impacts from adjusting current policies that affect timberland investment, area, harvests, and carbon. First, increases in tax rates faced by timberland owners cause timber assets to be revalued downward even though the physical forest is initially unchanged, resulting in substantial declines in both regeneration and management. Second, timber stocks fall over time, reflecting a decrease in investment. Third, tax revenues could increase by nearly $3.4 billion/yr compared to baseline, but at the expense of increasing trade deficits by up to $3.3 billion/yr. Fourth, timberland area could decrease by 12 million hectares. Last, cumulative carbon sequestration over the next 50 years could be reduced by more than 3 billion tCO2e, −22% from the current policy baseline if forestland tax incentives are removed. Fifth, maintaining the existing tax policies in perpetuity incentivizes carbon sequestration levels equivalent to imposing a price of $70/tCO2e on the forest sector, highlighting the ecosystem service benefits of maintaining current tax policy. Finally, we estimate that current US forest tax policy provides about $8 billion/yr in climate change mitigation benefits by 2050.

Władztwo podatkowe i jego wpływ na budżety gminne

Przedmiot badań: Przedmiotem badań jest próba określenia wpływu władztwa podatkowego gmin na ich budżety. Władztwo podatkowe nie dotyczy w jednakowym zakresie wszystkich podatków i opłat lokalnych. Możliwość obniżenia górnych stawek podatków, zastosowania ulg i zwolnień (bez ulg i zwolnień ustawowych) oraz kształtowania warunków płatności podatków i składania deklaracji podatkowych dotyczy podatku rolnego, leśnego, od nieruchomości jak również od środków transportowych, czyli podatków pobieranych przez samorządowe organy podatkowe. Należy się zastanowić, czy przyznany gminom zakres władztwa podatkowego może być związany z ryzykiem utraty stabilności finansowej jednostki.
 Cel badawczy: Celem niniejszego opracowania jest określenie wpływu władztwa podatkowego na budżety gmin.
 Metody badawcze: W opracowaniu zostały wykorzystane grupy metod typowych dla nauk społecz­nych. Jej elementami jest poznanie empiryczne związane z obserwacją, porównaniem i pomiarem, który dokonano w przedziale czasowym 2014–2018.
 Wyniki: Z przeprowadzonych badań wynika, że władztwo podatkowe nie dotyczy wszystkich rodzajów podatków. Gminy korzystają najczęściej z uprawnień związanych z obniżaniem górnych granic stawek podatkowych. Przypada na nie od 76 do 78% ogółu utraconych dochodów. Spośród konkretnych źródeł utraconych dochodów w tej grupie należy wskazać podatek od nieruchomości. Kolejną grupą, która generuje znaczny poziom utraconych dochodów, jest stosowanie ulg i zwolnień. W skali wszystkich typów gmin jest to 17%. W znacznie mniejszym stopniu gminy wykorzystują uprawnienia w zakresie umarzania zaległości podatkowych – 3% utraconych dochodów oraz roz­kładania na raty lub odraczania terminu płatności – 2% utraconych dochodów. Stosowanie przez gminy władztwa podatkowego skutkuje utratą części dochodów. W krótkim okresie rezygnacja z części dochodów może ograniczyć możliwość funkcjonowania bądź nawet konieczność pozy­skiwania dodatkowych środków finansowych. Natomiast w długim okresie pojawi się pozytywne oddziaływanie decyzji o pozostawieniu pieniędzy w rękach podatników.

Impacts of forest tax under timber price uncertainty

We examine the effect of forest taxes on the optimal harvest decision and the forest land value using an adaptive optimization framework– the stand is harvested when the stumpage price is equal or higher than an age-dependent reservation price. We prove that the site value tax or site productivity tax does not change the optimal reservation prices; the timber value tax reduces the optimal reservation prices; the yield tax increases the optimal reservation prices when the non-timber benefits are increasing with stand age, or when they are independent of the stand age and the regeneration cost is positive; and the unit harvest tax increases the reservation prices when stand age is relatively high and could reduce the reservation price when stand age is low. Numerical results show that the optimal harvest age is only sensitive to the unit and timber value tax. The tax burden is reduced for all types of taxes except the site value tax. Under a taxation budget constraint, recognition of stumpage price uncertainty may change forest owners’ preferences for different types of taxes.

Подвійне оподаткування лісових земель в Україні та його наслідки для лісогосподарської та деревообробної галузей

Розглянуто теоретичні аспекти та головні економічні наслідки для лісогосподарської та суміжних з нею галузей в Україні від запровадження податку на лісові землі з одночасним збереженням рентних платежів за спеціальне використання лісових ресурсів. Проаналізовано останні зміни в законодавстві України щодо оподаткування лісових земель та теоретично доведено суперечливість для економіки держави введення подвійного їх оподаткування. Обґрунтовано нерівнозначність підходів до оподаткування сільськогосподарських та лісових земель. З'ясовано, що одержувачем фінансової вигоди від введення податку на лісові землі є об'єднані територіальні, насамперед сільські громади, а постраждалою стороною – лісокористувачі: підприємства лісового господарства безпосередньо та деревообробної галузі, малого бізнесу – опосередковано через вірогідність зростання цін на деревину. Встановлено позитивну динаміку впродовж 2016-2018 рр. обсягів податків та виплат до соціальних фондів держави, сплачених підприємствами Державного агентства лісових ресурсів України та визначено в них та в доходах від реалізації продукції, робіт та послуг частку рентних платежів за спеціальне використання лісових ресурсів. Розраховано за областями України на 2019 р. прогнозні обсяги земельного податку із вкритих лісовою рослинністю земель. Визначено категорії лісових земель, які не можуть приносити дохід їх користувачу і тому мають бути вилучені з бази оподаткування земельним податком. Запропоновано два шляхи вирішення проблеми подвійного оподаткування лісових земель.

Certification of tropical forests: A private instrument of public interest? A focus on the Congo Basin

Forest management certification seems to be stagnating or even receding in the Congo basin. This is attributable to the financial difficulties of some European companies, but might also be a consequence of unexpected interactions with the FLEGT process, which is lagging behind in the Congo Basin. Although this process and private certifications are expected to be complementary, the reluctance of EU authorities to give certified timber a “green lane” for entering the European market may discourage concessionaires from seeking a stringent certificate, while the demand for timber is increasingly shifting towards markets in China and other emerging countries that are not ready to pay a “price premium”. An underlying issue is the difficulty in qualifying the added value of certified timber over legal timber, although some research has shown how certification has closed loopholes in public regulations. Recognition of the public interest of certification could be achieved through fully trusting private certificates for due diligence procedures and, eventually, for obtaining FLEGT licences. Public verification and traceability efforts would be re-centred on non-certified timber and the informal sector, which intersects with forest tenure issues. While some countries wish to make certification compulsory, this article prefers to propose the use of financial incentives through differentiated forest taxes, in order to preserve the credibility of standards, and it details potential mechanisms that could reinforce the independence of auditors.

The Impact of the Training Set Size on the Classification of Real Estate with an Increased Fiscal Burden

Abstract The introduction of an ad valorem tax can lead to an increase in the tax burden on real estate. There are concerns that this increase will be large and widespread. Before undertaking any actual actions related to the real estate tax reform, pilot studies and statistical analyses need to be conducted in order to verify the validity of those concerns and other aspects regarding the replacement of a real estate tax, agricultural tax and forest tax with an ad valorem tax. The article presents results of research on the effectiveness of the classification of real estate into a group at risk of an increase of tax burden with the use of the k-nearest neighbors method. The main focus was to determine the size of a real estate set (training data set) on the basis of which classification is conducted, as well as on the efficiency of that classification, depending on the size of such data set.

An investigation of the effects of conservation incentive programs on management of invasive species by private landowners

AbstractInvasive species are a large and growing threat to biodiversity and ecosystem service provisioning globally as well as in southern Ontario, Canada's most biodiverse region. As in many other world regions, most land in southern Ontario is privately owned and therefore conservation programs that aim at private lands are important. Conservation incentive programs that target private lands are increasingly popular, but little is known about their effectiveness in achieving conservation objectives. To address this knowledge gap, we used a large survey of 1,200 Ontario landowners to investigate how successful conservation incentive programs are at motivating landowners to engage in invasive species management. Utilizing a quasi‐experimental approach, we surveyed landowners participating in the Conservation Lands Tax Incentive Program (CLTIP), the Managed Forest Tax Incentive Program (MFTIP), or in both programs, as well as landowners who were program eligible but did not participate. Our results demonstrate the differential effects of participation in the two programs on specific landowner conservation behaviors: While participation in the MFTIP increased the likelihood of removing invasive species by a factor 2.5 and the planting of native species by a factor 4.3, participants in the CLTIP were no more likely to engage in these behaviors than landowners who did not participate in either program. We suggest that this behavioral disparity is due to the differences in the program designs: The CLTIP does not require a management plan, favors a short planning horizon, and mainly encourages passive management; in doing so it essentially breaks the causal chain that reinforces landowners' environmental awareness and a sense of responsibility for taking conservation actions. Our recommendations include requirements for impact evaluations of private land conservation incentive programs to ensure they achieve stated program outcomes, as well as conservation incentive program designs that oblige landowners to actively manage their land over longer time horizons.

Podatki lokalne jako źródło dochodów samorządu gminnego. Analiza podatku od nieruchomości, podatku rolnego i leśnego w gminie Lidzbark w latach 2010–2015

According to Art. 167 of Polish Constitution, there are three main sources of local self-governments revenues: an own income, subsidies and grants. The own income of local communes (gminy) consists of local taxes and fees, including taxes which may also be collectively called “land taxes”. Those taxes include a property tax, an agricultural tax and a forest tax. The authorities of local self-governments are entitled to decide on some aspects of local taxes, especially they are able to establish tax rates. The article presents land taxes as a source of revenue of gmina Lidzbark in the years 2010–2015.