Indonesia’s Ministry of Forestry will soon raise fees on forest exploitation activities including logging, mining, and oil and gas exploration as part of an effort to increase income from resource use, reports The Jakarta Post.
The new tax would be set at four million rupiah ($410) per hectare per year, a third higher than the current rate. The proposed revision still requires sign off from the Ministry of Finance.
Forestry Minister Zulkifli Hasan told the The Jakarta Post that the measure would boost the government’s non-tax income from the forestry sector to 4-6 trillion rupiah in 2013 and 2014, up from 3 trillion last year.
As of February this year, the Ministry of Forestry has issued 471 mining exploration permits covering 2.45 million hectares of the country’s forest estate and 377 exploitation permits covering 370,883 ha.
Under the 1999 forestry law, developers are required to obtain use permits before engaging in activities in areas zoned as part of the forest estate. The Ministry of Forest controls use of land within Indonesia’s forest estate, whether it is forested or not.
Forest clearing for oil palm in Indonesia’s Central Kalimantan, March 2013.
The new fee comes at the same time that the Indonesian government is rumored to be weighing new restrictions on plantation development. According to a report in Bisnis Indonesia, the Ministry of Agriculture will soon issue rules limiting plantation holdings to 100,000 ha per owner, although it wasn’t immediately clear how the proposed change would apply to palm oil companies, which in practice often control a web of affiliates and subsidiaries.
Plantation development in Indonesia is currently restricted by the country’s moratorium on new concessions in 14 million hectares of primary forests and peat land areas. However the moratorium is scheduled to expire next month, potentially opening large areas of forest to conversion.
Clearing of peatlands and forests is Indonesia’s largest source of greenhouse gas emissions and a major driver of social conflict.
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