The Ministry of Finance has recommended significant adjustments to timber export taxes and rights fees as part of broader environmental fiscal reforms outlined in the Medium-Term Revenue Strategy (MTRS) 2024-2027 report.

Among the proposed measures is an increase in timber export taxes from 1.5% to 3% and the fixing of timber rights fees at 5%.

The initiative, which aims to address both environmental and fiscal concerns, calls for the Ministry of Lands and Natural Resources (MLNR) to collaborate with the Forestry Commission, the office of the Administrator of Stool Lands, and other stakeholders to review stumpage fees, royalties, and the costs associated with felled timber.

The Finance Ministry believes that these upward adjustments will ensure better revenue generation for the country, while also promoting sustainable forest management practices.

The reforms are part of the Environmental Fiscal Reform (EFR) agenda, which seeks to promote environmentally sustainable policies while encouraging the adoption of renewable energy sources and reducing harmful activities that contribute to pollution. According to the Ministry, Ghana is already implementing several environmental fiscal policies across sectors, but there is still ample room for improvement, especially in the governance of the extractive resources sector.

The Ministry emphasized the importance of harmonizing existing instruments to enhance environmental governance and fiscal outcomes. The proposed increase in timber export taxes and rights fees is expected to contribute not only to improved fiscal dividends but also to environmental, economic, and social benefits.

Recent statistics from the Forestry Commission's Timber Industry Development Division indicate a decline in timber exports. In the third quarter (Q3) of 2023, 68,785m³ of wood products were exported, down from 81,683m³ in the second quarter (Q2). Over the first nine months of 2023, total wood exports fell by 15%, from 267,622m³ in the same period in 2022 to 227,245m³. The value of Q3 exports was €30.64 million, compared to €45.56 million a year earlier, reflecting a 33% drop.

Despite the overall decline, some wood products recorded increases. Plywood exports to West African markets and briquettes to the UK and Ireland saw volume increases of 22% and 26%, respectively, in Q3 2023 compared to Q2 of the same year. Other products exported during the period included dowels, sliced veneer, KD boules, and offcuts.

However, the export of timber and wood products in June 2024 saw a decrease in both value and volume. A total of 21,126.359m³ was exported, yielding €9.14 million, a 24.40% drop in value compared to June 2023, when 25,862.898m³ of wood products brought in €12.10 million.

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