Law number 90-003 of 9 June 1990 relative to the Central African Republic’s Forestry Code was promulgated by the President of the Republic having been presented to and passed by the National Assembly. It replaces the old Forestry Code which dated from 1961. The 1990 Code, unlike the 1961 code, was the fruit of large-scale concentration, interdisciplinary and inter-ministerial cooperation. Article 1 of this law stipulates that the present code has the aim of:
• Harmonising the priorities of making the forestry heritage profitable and the priorities of conservation through management in view of a natural balance; and
• Conserving and protecting plant formations to allow for their regeneration and to guarantee the perennial nature of forestry.
The code is divided up into seven parts, that is: the definitions and categories of plant formations, the usual rights of use, types of harvesting, the listing rules, taxation, procedures for cracking down on offences and transitory clauses. It is the masterpiece of the Central African Republic’s forestry policy. Laws from this Code were taken and for this reason, decree number 91-018 of 2 February 1991 will be quoted in particular. This sets out the methods for granting permits for harvesting and development (PHD) and which institutes a mechanism for consulting local populations in forest areas for all questions pertaining to the harvesting of the forest. It should be highlighted that article 2 of this decree stipulates that only companies legally constituted in the Central African Republic with public, mixed or private capital, can request a PHD. All granting of forestry permits is accompanied by a schedule of conditions, which specifies the technical conditions of harvesting.
It is thus this Forestry Code which outlines forestry taxes. As it was said previously, the Code was revised by different finance laws from 1994 onwards. The finance law decrees the budget for the Central African Republic for a given year. It is then deliberated upon and passed by the National Assembly, then promulgated by the President of the Republic, the Head of State.
These finance laws directed by government policy modify certain clauses in the Forestry Code according to importance of forestry sector activities. The two official documents (the Forestry Code and the Finance Law) are published in the Official State journal, as well as in the public and private media.
Customs taxes and others, linked to export, are defined by the customs code. Their rates are also modified by the different finance laws. The same applies to indirect taxes, which are the taxes on turnover (TOT) on local sales and on transport, which today is called Value Added Tax (VAT).
The administration and management of forestry resources are under the Ministry for the Environment of Water, Forestry, Hunting and Fisheries. This Ministry is responsible under general government policy for the drafting and setting up of national policy for forestry. It has the objective of studying, regulating, managing and monitoring all economic development activities in forestry. The General Management of Central Services in this department is responsible for the application of development policy in the sector. For this reason, it more specifically monitors the harvesting of forestry resources, follows the changes in taxes and forestry dues and proposes their eventual re-evaluation. It includes two management sectors, that is, the Forestry Office and the Fauna Office.
The Forestry Office has the task of drawing up forestry inventories and development plans, of creating and monitoring forestry regulations, of keeping projects assigned to forestry up-to-date and issuing invoices for revenue pertaining to taxes and forestry dues.
The Regional Services Office is responsible for co-ordinating and supervising all activities of the Forestry Divisions (Regional Offices for Water and Forestry). Forestry Divisions ensure the monitoring of harvesting in forests; they do research and sanction all offences relative to forestry. They must monitor the harvesting of forestry resources and ensure the collection of the different taxes and dues of the department.
Concerning the evaluation of taxes, article 79 of the Forestry Code specifies that:
“The holders of permits are to present to the Forestry Office, before the 20th of each month, a state of affairs for the previous month indicating the number of cubic metres per species felled. When this state of affairs is judged to be exact, the Forestry Office establishes an invoice for revenue which must be paid in the thirty days which follow its reception. The products taxed (log and sawnwood) are thus evaluated, listed according to their quality and declared by forestry companies themselves to the Forestry Office.”
Concerning customs taxes and other indirect taxes, the Central African Republic’s government signed a convention on wood harvesting with the General Surveillance Company (GSC), a branch of the GSC Forestry Division. It is responsible for declaring wood exports (declaration on the quality, quantity, price and revenue). This declaration implies the issuing of a certificate of verification (inspection of products before embarkation.)
In order to avoid an inaccurate registration of the production of forestry companies, article 10 of the schedule of conditions foresees having a worksite logbook which will be gradually completed as felling takes place. Information is recorded under the different headings (species, diameters, quality, length of trunk, the trunk volume, number and volume of billets etc.).
This document will be used for the purposes of producing monthly statistics and of monitoring by the services of the Forestry Department quoted previously. Tax evasion probably occurs either due to this worksite logbook being completed on an irregular basis or due to the irregularity and or inefficiency in the monitoring carried out by the monitoring services quoted previously also.
In the case of omissions and fraud which tend to modify or manipulate the decrease in volumes of wood felled, the holders of permits will be liable for a fine of 5 to 10 million FCFA. If this reoccurs, the pure and simple withdrawal of the harvesting permit will take place, in spite of legal procedures which will be undertaken by the holders of the permits.
With regard to the collection of taxes, this is done separately at the level of each structure to benefit from these taxes and according to the types of taxes:
• Forestry taxes: The invoices for revenue are issued by the Forestry Office in the name of the different beneficiaries. That is, the Fund for Forestry and Tourism Development (FFTD) which became under the 2000 finance law, the Special Allocation Account – Forestry and Tourism Development (SAA-FTD), the Office for National Property for the Account of the Public Revenue Department and the Towns.
• On reception of the invoices for revenue, special agents are responsible for collection for the SAA-FTD and the Office for National Property, the mayor of the town or the secretary general of the Town Hall or the accountant for the towns.
The invoices for revenue issued are paid either in cash or by cheque. The forestry administration is responsible for issuing only invoices for revenue. However, institutions benefiting from this are responsible for following up the collection of these taxes. In the case of non-payment, the institutions have recourse to two possibilities:
• To consult the General Finance Inspection (under the auspices of the Ministry for Finance) in order to take progressive steps with regard to the subjects concerned, leading sometimes to legal proceedings; or
• To consult the special commission responsible for collecting credit and debt from public and State companies. Legal proceedings could be undertaken in the case of non-payment with an enforcement notice and or a seizure of goods.
However, it can be noted that concerning all of these taxes together, the 2000 finance law put in place a regular monitoring system authorised by the Director General for Taxes and National Property for the whole country for those eligible for tax. During these regular monitoring operations, seizures can be carried out by Tax Inspectors supported by the Public Authorities. Inspectors can go to close establishments that have not settled all their fiscal debts.
The rights liquidated during these regular monitoring operations vary in penalties for which the amount is determined taking into account the clauses pertaining to each tax, and the behaviour of the person eligible for tax.
With regard to the production of primary statistical information on forestry production and utilisation, four structures are involved in this area. There is the Office for Study, Co-ordination and Projects of the Ministry for Water and Forestry, the Office for Foreign Trade at the Ministry for Trade, the Statistical Information Office at the General Customs Office and the General Surveillance Company (GSC) responsible for the monitoring of quality, quantity, and the price of wood before export.
The Office for Study, Co-ordination and Projects of the Ministry for Water and Forestry centralises all the statistical information from other structures.
The Office for Foreign Trade at the Ministry for Trade registers export declarations from Customs who are responsible for specifying the value of exports. There is thus a sharing of information between the Ministry for Trade and the Customs Office in relation to wood exports.
The General Surveillance Company, following its monitoring operations, issues a certificate of verification to wood exporters. At the end of each year, it produces statistical information on the production and export of wood.
As it was mentioned previously, the forestry fiscal administration is based on a main law which is the Forestry Code. This Code is modified according to the content of the different finance laws which set the State budget for a given year.
The initiative in the legislation contained in the different finance laws comes from the Ministry for Finance. The technical offices concerned make their proposals, and following discussion in commissions, are presented to the government in a cabinet session. When passed by the cabinet, the proposals are presented to the National Assembly for passing and are then promulgated by the Head of State.
The technical services and the heads of the Department of Finance are to defend and justify their proposals at all levels in the procedure for passing the bill. These proposals take into account the transparency and the adaptation to market demand.
It should also be mentioned that the government had the audit of the forestry sector re-read by the Forestry GSC. The conclusions of this audit guided to a great extent the reforms in forestry taxation.
There is no efficient liasing process between the different administrations linked to forestry taxation in the country (the Ministry for Water and Forestry, the Ministry for Finance and the Ministry for Trade).
However, the ministries concerned have highlighted some common action:
• Inter-ministerial decrees (Ministry for Trade and the Ministry responsible for Forestry) setting the FOT values and the mercurial values of forestry products; and
• In accordance with the 2000-finance law, quotas on trees for export are set by the Ministry responsible for Forestry. The Ministries for Finance and Forestry will take all the necessary means in order to monitor the carrying out of these measures.
