Imposition and Collection of Five Types of Non-Tax State Revenue in the Forestry Sector

The Ministry of Environment and Forestry (“Ministry”) has issued Regulation No. P.71/MENLHK/SETJEN/HPL.3/8/2016 on Procedures for Imposition, Collection and Payments under the Forest Resource Provision, Reforestation Funds, Compensation for Damaged Areas of Existing Forests, Fines for Forestry-Exploitation Violations and Premiums for Forest-Exploitation Business Permits (“Regulation 71/2016”).Regulation 71/2016 clarifies the various types of forestry business-permit holders and forestry products which are to be subject to five types of non-tax state revenue (collectively referred to as “Non-Tax State Revenue”), and encompasses:1)Forestry-resource provisions (“ForestProvisions”) [1] ;2)Reforestation funds (“ReforestationFunds”) [2] ;3)Compensation for damaged areas of existing forest (“Compensation”);4)Fines for violations of forestry exploitation (“ViolationFines”); and5)Premiums for forestry-exploitation business permits (“ExploitationPremiums”). [3] Prior to the issuance of the Regulation 71/2016, these same matters were regulated under Ministry Regulation No. P.44/MENLHK-SETJEN 2015 on Procedures for Imposition, Collection and Payments under the Forestry-Resource Provision, Reforestation Funds, Compensation for Stumpage Value, Imposition for Damage Done to Areas of Existing Forest, and Premiums for Forestry-Exploitation Business Permits (“Regulation 44/2015”).Regulation 71/2016 is of relevance to existing forestry businesses, as well as to any businesses which are looking to engage in activities within forested areas.Non-Tax State RevenueForest Provisions and Reforestation Funds are imposed upon certain parties working within the forestry sector and cover certain types of forestry products. In terms of which parties are ultimately responsible for the Forestry Provision and Reforestation Funds, Regulation 71/2016 sets out the following: [4]