Charges for wood production in Uganda are classified into timber royalty, forest produce fees and licence fees. The levels of these charges are contained in the Forest Produce Fees and Licence Order 2000 (Government of Uganda, 2000) and these charges are levied both in forest plantations and natural forests, but not in private forests. There is no regional variation in the charges on roundwood.
Timber royalty is charged on the basis of volume (in cubic meters) of roundwood taken by sawmillers and pitsawyers. The rate charged per cubic meter varies with species and is based on the value of different timber species and market demand. These charges are currently grouped into three classes, with class one representing the species with the most value and highest demand, followed by class two and class three. Class one is further subdivided into Class A and Class B (see Annex 2 for a listing of the species in these classes).
In addition to timber royalty, sawmillers and pitsawyers also pay registration fees of Ush 1,400,000 and Ush 350,000 respectively for their forest concessions. For sawmills consuming an average of 2,300 ‑ 4,200 cubic metres per year, a concession of 5 years is awarded. For sawmills consuming 500 ‑ 2,300 cubic metres per year, a concession of two years is awarded and for handsaws, a one-year concession is offered. The registration fee is paid every year until the concession expires, after which a new application is required. After the registration fees have been paid, a licence is issued to the sawmiller or pitsawyer. This shows the area of operations, gives a description of the products that may be taken, states the annual allowable cut (AAC) and species that may be harvested and gives the minimum cutting diameter for each species etc. (see Annex 3 for an example). The licence is only issued for harvesting; management of the forest remains the responsibility of the Forestry Department.
The forest produce fees are charges levied on smaller sizes of roundwood. Poles are classified according to diameter classes and a distinction is made between poles from forest plantations and poles from the natural forest. Charges are levied per pole for the smaller poles in classes I and II (0.5 - 14cm dbh) and per running metre (i.e. length of the pole in metres) for the larger poles in classes III and IV (15 - 24cm dbh). A cutting charge per pole is also levied on every pole that is harvested.
Faggots (withes) are charged per head-load and fence posts are charged per running metre. Similarly, palms are charged per running metre. Firewood from forest plantations and natural forest reserves is charged per stacked cubic metre. For firewood from other types of public land, firewood is charged per stacked cubic meter or a monthly licence is issued, depending on the interest of the person. In most cases, monthly licences are issued to people who harvest firewood regularly (e.g. firewood traders). The amount charged for the licence varies with the scale of production, with large-scale firewood producers paying more than small traders do.
There is also a charge levied on the haulage or conveyance of firewood, which is based on the size of the vehicle used. A lorry is charged the most and a bicycle is charged the least.
Timber grading fees (payable per cubic metre of sawnwood) are also contained in the Forest Produce Fees and Licences Order 2000. However, they are not charged at the moment because the Forestry Department has not resumed this service.
In Uganda, the most common non-wood forest products include: charcoal; bamboo; Christmas trees; seeds and seedlings; palms; rattan canes; minor forest produce (MFP); and minerals extracted from the forest. Forest services include: ecotourism; grazing; and hunting.
Licences to produce and sell charcoal are charged per person per month and licences for conveyance are charged according to the size of the vehicle (lorries, pickups, canoes and bicycles). Bamboo and Christmas trees are charged per pole and per tree respectively. Seeds are charged per kilogram and seedlings are charged per seedling.
For MFP (e.g. beds, chairs, mats, baskets, fruits, honey, herbal medicines, ornamentals, wood carvings, walking sticks, drum frames and brewing troughs), casual trade licences are issued and a fee is paid per person per year. Similarly, licences are issued per month per person for harvesting wild coffee. Gum Arabic and resins are charged per kilogram.
Licences for extracting forest minerals (e.g. brick making materials and sandstone) are charged per person per month and higher charges are levied on the production of minerals near cities than in other areas.
Another charge paid by sawmillers and pitsawyers is 17% Value Added Tax (VAT), which is charged on sawnwood and is paid to the Uganda Revenue Authority (URA). In Uganda, all businesses must charge VAT unless their annual gross income is less than Ush 20 million. Below this threshold, businesses are not required to charge VAT. Therefore, small sawmillers and pitsawyers do not usually have to pay this tax because their gross income does not reach the threshold. However, in these cases, the sawmillers and pitsawyers have to pay a tax of 15% (of the value of timber sold) to the Forest Department.
Currently, all producers in private forests and all pitsawyers are below the VAT threshold and have to pay this tax. In fact, the bulk of timber production in Uganda comes from small producers and traders who do not reach the VAT threshold, so only a small fraction of the potential revenue in the form of VAT is currently collected.
The Forestry Department does not have a mandate to levy charges on any other type of production (e.g. production of wood-based panels, pulp and paper etc). However, the URA collects general taxes from the forest industry (e.g. income and corporation taxes). The URA uses a broad classification of all businesses and divides them into large, medium and small taxpayers, depending on their income. Each class has a flat rate of income tax that is paid annually. Therefore, the amount of income tax paid by a business in the forestry sector depends on the level of income it generates.
Other general taxes, fees and licence fees (e.g. for the export or production of processed forest products) are the responsibility of the Ministry of Commerce.
The Forestry Department does not collect any charges on forest product trade. However, trading licenses are required to sell processed forest products and these are issued by urban or local authorities, depending on the location. These licences are issued for one year and the revenue from the charges for these licences goes to local government.
In terms of international trade, there are no taxes or inspection fees on exports. This is the current policy of the Government of Uganda, which is intended to promote exports and increase foreign exchange earnings. The only tax on international trade is a re-export tax, which is charged on forest products that are imported and then re-exported to other countries.
At the moment, all roundwood used in Uganda is produced from domestic sources. There are no imports of roundwood and roundwood exports were banned in the 1980's. Most forest product exports are exports of wooden handicrafts and woodcarvings. The number of people exporting these products is quite small, so the amount of exports is small and is unlikely to have a significant impact on forest resources.
Another type of forest charge is ground rent, which is paid by farmers who use government forest reserve land to plant trees (see Box 1 for further details). Rent is charged per hectare per year and, until recently, this rent was fixed at Ush 1,500 per hectare per year.
Box 1 Renting forest land to promote private tree planting
|
Renting
forest land was first introduced in peri-urban areas where the Government had
established forest plantations for poles and fuelwood. The purpose of this
was to make land available for interested and capable individuals,
institutions or organisations to plant trees to supply the urban areas with
poles and fuelwood. At first, this was done because the Forestry Department
was unable to replant these areas (due to lack of resources), but later it
was seen as an initiative to involve private farmers in tree planting. Under
this scheme, each farmer is allocated a five hectare plot. The Forestry
Department is responsible for technical guidance in planting and tending
operations but the farmer covers all of the costs of labour and materials.
Usually, eucalyptus trees are planted in these plantations. When the trees
are harvested, all of the income from the sale of the poles and fuelwood goes
to the farmer. Because of the high demand for poles and fuelwood in urban areas, this scheme has been very successful and large areas of privately managed eucalyptus plantations can be found in many peri-urban areas today. The same system is now being examined for industrial softwood plantations and some investors have already shown interest in participating in such a scheme. |
Rental payments for other uses of the forest (e.g. radio masts, electricity power lines etc.) are not currently included in the forest revenue system. However, with the intended transformation of the Forestry Department into a self-financing National Forestry Authority all of these potential sources of revenue will be exploited. Innovative revenue raising schemes will also be examined, such as payments for carbon storage and the development of privately owned ecotourism projects.
Apart from all of the above charges, there are also fines and penalties for breaking forestry laws and regulations. When a person is convicted of an offence under the provisions of the Forests Act or any other rules and regulations, they may be imprisoned for up to six months and/or fined up to Ush 2,000. All of the equipment and forest products associated with the offence may be seized by the court and sold, with the revenue going to the Forestry Department. A convicted person may also be made to pay compensation equal to the value of any products lost through illegal acts.
The problem with the fine described above is that it is extremely low and is not high enough to discourage unlawful practices. The effect of low fines, especially low fines for offences committed in the forest, was that they were encouraging illegal activities, with the result that offences were on the increase. For example, if an offender knows that they may only lose 10% or less of the value of their production, they would often prefer to act illegally. Such uncontrolled and, in most cases, unprofessional harvesting leads to forest degradation. In addition, harvesting more than the AAC results into over exploitation and reduces the resource base.
Having realised this, the Forestry Department has started to enforce higher penalties. For example, when an offence has been committed, all forest products are now seized and are sold by the Forestry Department at a public auction. This is organised on regular basis and these auctions now account for approximately 15% of monthly revenue collection. A timber monitoring task force has been given the responsibility to collect illegal forest products from timber depots, building sites, transit vehicles and backyards etc. and to bring this to the Forestry Department headquarters for auctioning.
The latest forest charges were calculated on 30th November 1999 and set-out in the Forest Produce Fees and Licence Order 2000, which came into force in March 2000. All forest charges are included in this schedule, which is shown in Table 1.
Table 1 Timber royalty, forest produce fees and licence fees
|
Item |
Amount |
Remarks |
|
i. Timber1 |
||
|
Class IA - Hardwoods |
100,000 |
Per standing cubic metre true measure |
|
Class IB - Hardwoods and cypress |
45,000 |
Over-bark (from FD tables) |
|
Class II - Hardwoods & pines |
28,100 |
Over-bark (from FD tables) |
|
Class III - Hardwoods |
17,000 |
Over-bark (from FD tables) |
|
ii. Poles |
||
|
A From forest
plantations |
||
|
Class I (5 - 9 cm dbh) |
800 |
Per standing pole |
|
Class II (10 - 14 cm dbh) |
1,400 |
Per standing pole |
|
Class III (15 -
19 cm dbh) |
1,400 |
Per running metre of length |
|
Class IV (20 - 24 cm dbh) |
1,800 |
Per running metre of length |
|
B From the natural
forest and bush |
||
|
Class I (5 - 9 cm dbh) |
900 |
Per standing pole |
|
Class II (10 - 14 cm dbh) |
1,600 |
Per standing pole |
|
C Cutting Charges2
|
200 |
Per pole |
|
iii. Faggots (withes) |
1,000 |
Per head load |
|
iv. Fencing posts |
||
|
A Treated posts |
||
|
Class II (10 - 14 cm dbh) |
1,400 |
Per running meter of post |
|
Class III (15 19 cm dbh) |
1,800 |
Per running meter of post |
|
Class IV (20 24 cm dbh) |
2,700 |
Per running meter of post |
|
B Untreated posts (from
forest plantations) |
||
|
Class II (10 - 14 cm dbh) |
700 |
Per running meter of post |
|
Class III (15 19 cm dbh) |
1,400 |
Per running meter of post |
|
Class IV (20 24 cm dbh) |
1,800 |
Per running meter of post |
|
C Palms (P Reclinata) |
400 |
Per running meter |
|
v. Firewood |
||
|
A From forest plantation |
6,000 |
Per stacked cubic metre (in forest reserves) |
|
B From the natural
forest and bush |
7,500 |
Per stacked cubic metre (on other public land) |
|
C Licence fees3
|
||
|
I Petty trade |
22,000 |
Per month per person |
|
II Large scale wood cutting and trade |
225,000 |
Per month per person |
|
D Licence for firewood
transportation4 |
||
|
I Lorry |
45,000 |
Valid for 3 days from the date of issue |
|
II Pick-up or canoe |
17,000 |
Valid for the date of issue of the licence |
|
III Bicycle |
12,000 |
Per month per person |
|
vi. Charcoal5 |
||
|
A Licence to burn
and/or sell |
36,000 |
Per month per person |
|
B - Licence for charcoal
transportation4 |
||
|
I Lorry |
62,000 |
Valid for 3 days from the date of issue |
|
II Pick-up or canoe |
40,000 |
Valid for the date of issue of the licence |
|
III Bicycle |
22,000 |
Per month per person |
|
vii. Bamboo |
||
|
Wild and forest plantation species |
500 |
Per pole (in forest reserves and public land) |
|
viii. Christmas trees6 |
||
|
Below 3m high |
7,000 |
Per tree |
|
3-5m high |
10,000 |
Per tree |
|
Over 5m high |
14,000 |
Per tree |
Table 1 Timber
royalty, forest produce fees and licence fees (continued)
|
Item |
Amount |
Remarks |
|
ix. Seeds and seedlings7
|
||
|
A Seeds |
10,000+ |
Per kg. Depending on species |
|
B Seedlings8 |
50+ |
Depending on species and size |
|
C Fruit plants |
1,000+ |
Depending on species and size |
|
D Wildings |
50+ |
Depending on species and size |
|
Ornamentals |
5,000+ |
Shade and foliage trees and shrubs and indoor
plants |
|
x. Palms |
||
|
Borassus palm and other palms |
12,000 |
Per tree (in forest reserves and public land) |
|
xi. Rattan canes |
45,000 |
Per person per month (in forest reserves and
public land) |
|
xii. Timber grading fees9
|
22,000 |
Per cubic metre |
|
xiii. Felling fees10
|
4,500 |
Per tree |
|
xiv. Sawmilling licence fee |
1,400,000 |
Per year per sawmiller (applied in forest
reserves) |
|
xv. Pitsawyers registration
fee |
350,000 |
Per year per pitsawyer (applied on reserved land) |
|
xvi. Forest fees on sawn
timber |
15% |
of the value of the sawn timber11 |
|
xvii. Casual trade licenses |
||
|
Walking sticks, stools,
wood carvings, wooden tools and tool handles, mortar and pestles |
45,000 |
Per year per person (for petty trade in all areas) |
|
Non-wood forest products
(e.g. grasses, palm fronds, forest lianas and climbers, mats, baskets,
winnowers) |
45,000 |
Per year per person (for petty trade in all areas) |
|
Forest based food (e.g.
bamboo shoots, palm oil, other forest fruits and vegetables) |
45,000 |
Per year per person (for petty trade in all areas) |
|
xviii. Wild coffee |
25,000 |
Per month per person (in forest reserves) |
|
xix. Gum Arabic |
800 |
Per kg (in forest reserves) |
|
xx. Resins |
150 |
Per kg (in forest reserves) |
|
xxi. Forest minerals |
||
|
A Bricks (Mpigi, Entebbe, Kampala) |
300,000 |
Per month per person (in forest reserves) |
|
B Bricks (other areas) |
100,000 |
Per month per person (in forest reserves) |
|
C Sand (Mpigi, Entebbe, Kampala) |
300,000 |
Per month per person (in forest reserves) |
|
D Sand (other areas) |
100,000 |
Per month per person (in forest reserves) |
|
E Stones (all
areas) |
68,000 |
Per month per person (applied in forest reserves) |
|
F Murram (all
areas) |
11,250 |
Per tonne (in forest reserves) |
Source: Government of Uganda
(2000)
Notes: 1. A
complete list of the species in classes IA, IB, II and III is given in Annex 2.
2. This
is a labour charge for cutting poles, which is payable to the cutters.
3. This
type of licence is for firewood production on other public land and is used
mainly by commercial producers.
4. This
is paid by everyone transporting firewood and charcoal, regardless of the
origin of the produce.
5. This
is paid for the production and/or sale of charcoal produced on public land
(charcoal burning banned in forest reserves).
6. This
is the price charged (per plant) in Forestry Department nurseries.
7. This
is the price charged in Forestry Department seed centres and nurseries
respectively.
8. This
includes planting materials raised from forest tree species.
9. This
fee is paid by timber owners to graders, regardless of the source of the
timber.
10. This
is paid by forest concessionaires to the DFO to obtain a felling permit. It is
paid for every tree felled, in all areas and in addition to any other charges
or fees due.
11. This is paid by sawmillers falling under the threshold for VAT and is applied in all areas. It is paid when a movement permit is issued.
