The forest revenue system in Mali is not defined very well. However, forest taxes should be paid for harvesting wood from all types of forest (state, communal and private forests), except in cases where harvesting is for non-commercial or subsistence use. It is believed that this exception results in a lot of tax evasion.
Taxes should be paid for the production of industrial roundwood, wood fuel and for forest clearance. The taxes on production are differentiated according to species and the type of forest where the harvesting takes place (i.e. controlled or managed harvesting as opposed to uncontrolled or unmanaged harvesting). The taxes on forest clearance are also differentiated by geographical region. Taxes are not currently levied on the production of NWFPs or on any other forestry activities. However, taxes on NWFP production will probably be introduced in the near future.
Forest taxes in Mali have been revised seven times since 1960 and were revised most recently in 1995, 1998 and 2001. However, the revision of taxes is not based on any scientific methodology and it is often difficult to implement tax increases. It is believed that the current level of forest taxes and revenue collection is totally inadequate to meet the need for reinvestment in the sector. Thus, in this respect, the forest revenue system does little to support sustainable forest management.
Most of the forest taxes are collected by the Nature Conservation Service but, in some areas, local management structures have been developed that participate in forest management (including tax collection). All money collected from forest taxes is sent to the national treasury, since the national forest fund was abolished in 1993. However, new laws have been passed recently that introduce arrangements for revenue sharing amongst different stakeholders. These arrangements include incentives for forestry personnel and others to report and try to stop illegal activities.
The total revenue collected from the sector includes revenue from the following sub-sectors: forestry; hunting; fishing; and other activities. Forestry accounts for the largest share of this by far (about 80%). In addition, the total amount of revenue collected is divided into revenue from harvesting taxes and revenue from transactions (e.g. fines and penalties). Over the last decade, the amount of revenue collected from transactions has approached 50% of the total in some years, but it usually only accounts for about 10% to 25% of the total. Total revenue collection is currently just under 200 million FCFA per year, which is much less than the amount collected in the late 1980’s (over 300 million FCFA).
Information about total public expenditure on forestry is only partially available for recent years. Excluding project expenditure, the average level of public expenditure on forestry was just under 3 billion FCFA per year from 1987 to 1991. From 1992 to 1995, the amount was slightly higher at just over 4 billion FCFA per year on average. About two-thirds of this money came from foreign donors. Over the last decade, forestry projects have amounted to additional expenditure of 9.4 billion FCFA, with almost all of this money coming from foreign donors. As these figures show, public expenditure on forestry is probably ten to twenty times higher than the total amount of revenue collected from the sector.
There are a number of problems with the current fiscal policies in the forestry sector in Mali. Firstly, the most important problem is that the level of taxes does not reflect the true cost of replacing the wood and other products that are harvested. However, a second problem is that it is also very difficult to raise taxes in such a poor country. Previous attempts to raise forest taxes have led to social problems as producers have passed on the costs of these increases to consumers. It is recommended in this report that taxes should be raised, but that measures should also be introduced to reduce the impact of this on consumers. In addition, it is suggested that the revenue sharing arrangements should give a greater priority to retaining revenue for forest management and that forest funds should be re-established to facilitate the recycling of tax money back into investment in the sector.
A more general problem concerns the overall strength of government finances in Mali. The government does not have a strong tax-base, so the budgets of public sector institutions are generally small and are inadequate to finance all of the investment required to achieve sustainable forest management. Donors have provided a lot of support to the forestry sector in the country in the past, but their priorities do not always match the national priorities. It is suggested that some sort of mechanism should be introduced to improve co-ordination between government forestry institutions, donors and non-governmental organisations.
