In forestry taxation, there is often confusion between the terms forest taxes and forest fees. The two terms are invariably used in place of each other, but there is actually a difference between the two terms. In fact fees, in the legal sense, adhere to the principle of financial equivalence. That is, there should be a certain proportionality between the total fee and the real cost of providing the good or service to users. In addition, fees are only due from individuals actually using the goods or services at their disposal. On the other hand, the principle of financial equivalence does not necessarily apply to taxes. Taxes have an obligatory nature and must be laid down by law. In most cases in forestry, the term “fees” would be more appropriate but, for pedagogical reasons, the term “tax” is used here.

The way that forest taxes are determined complies with the proposals made by the technical service. That is, that they should be determined by the state of the resource (i.e. they should take degradation into account). However, these taxes also take into account the income of rural harvesters and consumers. It is important to recall that wood satisfies 90% of the energy needs of households. Rates of tax that are too high could create social problems, like those of June 2000 with the enforcement of Decree 98-402.

Tax proposals are submitted in three stages. First, they are submitted for the approval of the supervisory department. Then, an inter-ministerial meeting examines the proposals of the technical department. It should be noted that the Chamber of Agriculture, which represents the interests of people living in the countryside, takes part in this inter-ministerial meeting. Finally, the Cabinet passes the document by decree, which then becomes enforceable immediately.

A bill is in the process of being passed, which will determine the methods and conditions for exercising the rights conferred by permits for harvesting forest resources. This bill provides for competition. In fact, in Articles 19, 20, 21 and 22 of Section 4 (on sales in felling areas), the following is stated:

“The felling areas for sale are demarcated on the ground by the Nature Conservation Service, which evaluates the species with potential for harvesting in terms of their number and volume and draws up a plan.”

“The rules for harvesting and the conditions to be met by the purchasers are recorded in a schedule of conditions for forest resources.”

“The sales of felling areas are done by an invitation to tender in a sealed envelope.”

“The date and place of purchase are announced at least one month in advance.”

This same bill also specifies the structure of commissions that should be paid for going through the tendering process as well as the secretarial costs that will be charged. This new law, which will be passed by the Cabinet in the near future, is characterised by a concern for transparency in the harvesting of forest resources. The passing of this decree will be followed by the drafting of a bill setting out the rates of tax on harvesting forestry resources.

It is planned to review and increase tax rates in order to ensure that enough revenue will be collected to reinvest in the renewal of forests. One of the important innovations of the new bill is the taxation of non-wood forest products (gum, leaves, bark, resins and herbs). Taxes on non-wood forest products (NWFPs) have the advantage of organising a sector that has remained informal for a long time. Likewise, a particular emphasis will also be placed on the forest harvesters who will have to become more professional in the future in order to get the rights to access forestry resources.

An excessive and anarchical removal of leaves and herbs around all towns is noticeable these days. In fact, the illicit practice of animal breeding around big cities is the cause of much of the harvesting of NWFPs (leaves, herbs), which is happening at an increasingly worrying pace. The areas where NWFPs are removed experience quite a lot of damage because they are reliant on rainfall. The excessive removal of leaves in a lot of cases leads to a fall off in plant formations and even their long-term disappearance following drought.

Taxes are updated every time it is required. Since Mali’s independence in 1960 up until today, laws governing the taxes on forest harvesting have been revised in 1968, 1977, 1981, 1986, 1995, 1998, and 2001. The review of forest tax rates always rests on the principle of the enhanced value of forest resources and the increase in revenue from rural populations.

Taxes set by laws in 1995, 1998 and 2001 take into account the need for reinvestment in the management of forest areas. In addition, they take particular note of the participation of all actors in the protection and restoration of forests. The main laws setting the rates of tax are the following:

Order number 77-22-CMLN of 25 February 1977;

Law number 81-04/AN-RM of 3 March 1984;

Decree 98-422/P-RM of 6 December 1995; and

Decree 98-402/P-RM of 17 December 1998.

Information on forestry taxes is clear and is presented to the public in the press and other types of mass media. Following the example of other laws in Mali, information on forestry taxes is first of all published in the Official Journal. It is also broadcast on national radio and broadcast in local languages on local radio stations (where these exist). Information and awareness programmes are also organised for rural populations through administrative and political activities.

The technical services in charge of each forest area, organise information meetings in village communities. Consultation is in fact used as part of the process of setting forestry taxes. The laws currently being amended have been subject to consultation with other technical departments with an interest in these issues.

The forest taxation issue mostly concerns the departments of Finance, Economy, Energy, Social Development, Rural Development and the Consular Chamber of Agriculture (which defends the interests of people living in the countryside). This means that the process of setting forestry tax rates is very open and transparent.

Forest taxes are not based on any formula or economic studies. However, criteria like the value of forest resources, the increase in incomes of rural populations, their increased buying power and market prices, all influence the setting of taxes. The increasing demand for wood, the erosion of forest areas and the decrease in the productive potential of forests, justify the increases in forest taxes from one period to another.

The assessment of taxes depends on the nature of the product. Thus, for example, fuelwood is assessed per stacked cubic metre (stère). There are in fact various monitoring procedures, from visiting the harvesting areas for other industrial roundwood and industrial roundwood for processing to a system for estimating fuelwood production. According to the means of transport used (bicycle, cart, truck, van, and wagon), the quantities of fuelwood transported can be estimated. The monitoring of charcoal, on the other hand, poses some difficulties in that the dimensions of the packing used vary considerably.

In the cases of industrial roundwood for processing and other industrial roundwood, the taxation system can lead to inaccurate recording of production in that it is based on units and not on volume. In fact, it is extremely difficult to estimate the volume of production from the number trees harvested as industrial roundwood for processing or other industrial roundwood.

The collection of forestry taxes is carried out locally when the permit for harvesting is issued. Forestry personnel responsible for collecting revenue for the public revenue department collect this money in cash. Local communities intervene in the payment of fees and the monitoring of production levels through the local management structures, which are village organisations involved in the management of rural wood markets.

Local management structures are made up of representatives from local communities. They work closely with the forestry service personnel responsible for the collection of fees. The management of the harvesting area is entrusted to the local management structure on a contract basis and the latter has the freedom to issue harvesting permits to individual harvesters and to pay taxes received, in their turn, to the forestry service personnel.

There is a system of follow-up visits to check accounts for tax payment in all administrative regions. The follow-up and checking are based on a system of periodic monitoring, which is carried out at all levels of the forestry service hierarchy.

The private-sector or local management structures make payments to the Nature Conservation Service in each working circle. The Head of the Nature Conservation Service in each circle is then responsible for paying taxes to the public revenue department.

The regional administrations carry out half-yearly checks on the Heads of the Nature Conservation Service to verify that taxes have in fact been paid to the public revenue department. The national administration also conducts annual checks to carry out the same task. Reports on activities and statistical documents produced each month by the Nature Conservation Service are used to check-up and follow up on payments.

Administrative operations that include revenue collection enable primary statistics on forestry production and utilisation to be generated. In return, these primary statistics on forestry production and utilisation assist with the direction of administrative operations. In other words, there is a very strong correlation between administrative operations and the creation of primary statistics on forestry production and utilisation.

The intervention of different levels of government in fiscal administration in the forestry sector is implemented through the consultative meetings of all ministerial departments with an interest in the sector. Under the decentralisation framework, territorial communities will also henceforth have a certain freedom to set forestry taxes and fees in their own forest areas.