Timber Cabals Seize GH10m From The State…

At the time the tax policies of the government have been reviewed, leading to increase in import and export duties, among a host of others, stumpage fees paid by timber contractors for each tree they harvest in our dwindling forest have remained same since 2003.

Intelligence report gathered by The Chronicle indicates that Mafia groups and some of the timber companies, most of which are owned by Lebanese and Syrians, have always thwarted the efforts by the Forestry Commission and other authorized agencies to have the fees increased.

Deep throat sources in the timber industry told this reporter that currently the timber companies pay a ridiculous GH¢25.20, GH¢27.37, GH¢31.60 each for Asanfina, Candollei and Utile trees they fell in the forest.

When these trees are exported to the Europeans countries, the timber companies sell them for 800 Euros or $2,400 and thus making huge profits, yet they only pay peanuts in terms of taxes to the central government and the district assemblies.

The Chronicle gathered that though efforts were made by both the Kufuor and Atta Mills’ governments to have the stumpage fees reviewed, the cabals in the industry managed to influence the decision makers to stop the intended move.

As a result of this nocturnal influence by the cabals, Ghana is said to be losing a whopping GH¢10 million annually, money which usually goes into private pockets of the players in the industry.

To stop this practice and make sure the government derives maximum taxes from the felling of trees in the forest, the current Chief Executive of the Forestry Commission (FC), Mr. Samuel Afari Dartey is said to have written a letter to both the sector Minister, Alhaji Inusah Fuseini and all the players in the industry, about the intention of the FC to increase the stumpage fees.

The letter, dated February 18th, 2014, and addressed to the minister, Ghana Timber Association (GTA), Ghana Timber Millers Organization (GTMO) and others, quoted the Timber Resources Management Regulations (LI 1649) as amended by LI 1721, which mandate the FC to review stumpage fees on the harvesting of timber species for commercial purposes.

All efforts made by this writer to contact Mr. Samuel Afari Dartey to comment on the letter he had written to the stakeholders demanding immediate review of the stumpage fees proved futile, as he failed to pick calls put through his cell phone.

However, when a text message was sent by the reporter to identify himself and his mission, Mr. Dartey responded with a promise to call back, but as at the time of going to press, no such call had come.

The Chronicle can, however, report on authority that the letter had already started causing ripples in the timber industry, as the mafia groups have already started their usual underground work to have the review stopped.

Mr. Dartey, however, insisted in his letter that ever since the fees were last reviewed in July 2003, the Commission (FC) has been unable to undertake the expected reviews, in compliance with the provisions of the law, due to circumstances beyond its control.

“As a consequence, the revised stumpage fees have not been applied. The resultant loss of revenue has affected not only the FC, but all stakeholders”, he noted, adding that the loss of revenue has further been worsened by the significant depreciation of the cedi against major foreign currencies over the period.

Based on this, Dartey argued that it was “prudent and urgent that fees are immediately reviewed in accordance with provisions of the law and also to reflect current economic realities to ensure that the FC generates adequate revenue to fund its mandate of managing, protecting and developing forest estate of the country, while at the same time generating adequate revenue for the landowners and the district assemblies, who rely heavily on the proceeds from the fees collection.”

In order not to immediately overburden the industry with the full revised fees, Mr. Dartey’s letter suggested a three phase approach in collecting the new fees.

From 1st March 2014, 50% of the revised stumpage fees will be charged (as per appendix II attached). Six months thereafter, in September 2014, 75% of the approved stumpage fees will be charged. Then from January 2015, the commission will resort to charging of 100% of the approved fees.

Sources at the Land and Natural Resources ministry told The Chronicle that attempts being made to stop the increment was not in the best interest of the country, since other sectors of the economy have had their taxes reviewed and that failure to review the stumpage fees would mean lining the private pockets of these timber companies with huge sums of money at the expense of the state.