The Ministry of Finance of the Russian Federation has published an updated version of the bill on the transfer of six quasi-tax payments to the Tax Code. Starting next year, an environmental fee, a recycling fee, a fee for negative environmental impacts, collection from heavy vehicles, a collection of telecom operators and hotel taxes are planned to be sent to the category of taxes.
The proposal of the Ministry of Finance is due to the need to improve the quality of administration during its transfer to the federal tax service and increase collection of payments. Outside the tax system, fees for the use of forests remain (Article 94 of the Forest Code of the Russian Federation). fee rates per unit volume of wood of forest stand established by Decree of the Government of the Russian Federation No. 310 dated 05/22/2007 differentially by:
▪ forest-tax areas,
▪ size of harvested wood (large, medium, small),
▪ distance from the forest to the points of shipment to consumers.
The object of evaluation is the stocks of standing timber to be harvested in growing stands. It is the difficulties in assessing wood according to the above parameters that led to the refusal of tax authorities to administer forest payments.
In 2004, the administration of standing timber fees in terms of their collection was transferred to the territorial bodies of the federal executive body in the field of forest relations in the constituent entities of the Russian Federation.
With the introduction of the Forest Code of 2006, the duties of collecting forest payments were transferred to the state authorities of the constituent entities of the Russian Federation by tacit agreement with the federal executive authority in the field of forest relations, despite the fact that the administration of payments was not included in the list of individual powers delegated to the governing bodies of the constituent entities of the Russian Federation (Article 83 of the Forest Code).
Thus, payments to the federal budget are collected by state authorities of the constituent entities of the Russian Federation, which have neither professional experience nor, moreover, motivation to do this work in a quality manner.
It is difficult to imagine the possibilities for efficient collection of payments by the ministry or department of the forest complex in a constituent entity of the Russian Federation, managing both the forest industry (payers) and forestry (providing information on the resource base).
With this combination of powers, inevitably, conditions are created for a conflict of interests, which can be resolved in practice through corrupt transactions and illegal activities. It is poor-quality non-tax administration of payments that is one of the reasons for their low level despite the periodically carried out directive increase in the base rate.
In 2017, the average standing fee for standing timber was 70 rubles per cubic meter, which determined its share in the Roundwood price at the level of 5-7% depending on the assortments. According to these two indicators, the Russian Federation is not only inferior to all countries with a developed forest sector in Europe but even worsened the situation that was in the Soviet Union when forest taxes were a local tax.
In Finland, where the characteristics of the forests and their operating conditions are close to the Russian ones, the average monthly fee, which with private forest ownership (private forests occupy 72% of the forest area), being the market price, is about 30 euros per m 3with differentiation by breeds and assortments.
The high level of the fee paid allows the Finns to comprehensively process all the biomass harvested on the basis of non-waste environmentally friendly technologies and, on this basis, conduct intensive forestry.
The object of transactions in the sale of standing timber in Finland is the recorded “measured” wood as part of assortments that have a specific purpose when using them (sawlog, balances, plywood logs, etc.).
In none of the European countries, as well as in the USA and Canada, the financial relations of the forest owner with forest users are not based only on estimates of the stocks of growing plantations, which carry a large number of uncertainties and risks.
Federal Law of December 28, 2013, No. 415-FZ created conditions for avoiding uncertainties and risks when assessing wood resources by introducing through the LesEGAIS system the mandatory accounting of harvested Roundwood logs.
As a result, a taxable base appeared in the forest sector, similar to that which exists in the extraction of mineral resources, namely, recorded extracted resources. Under these conditions, the forest tax can become an analog of the mineral extraction tax (MET), which successfully fulfills not only fiscal but also general economic and even political goals.
In accordance with federal law No. 415-FZ, all legal entities and individuals using forests for logging will be required to submit to the federal tax service a declaration with the documented LesEGAIS system of the volumes of assorted stocks in the nomenclature approved by the Government of the Russian Federation.
The basis for the establishment and differentiation of tax rates should be the differences in the efficiency of consumption of Roundwood assortments, estimated by market methods through the forest rent indicator.
Forest rent, being the residual value obtained by deducting the standard costs and profits from timber harvesting from Roundwood prices, will create the basis for establishing tax coefficients assigned to each assortment.
To create a convenient tax administration system, it is advisable to establish a basic assortment of Roundwood, assigning it a tax coefficient of 1.0. Such a basic assortment can be, for example, a massive coniferous sawlog in use. Then all other assortments will receive tax coefficients expressed by the ratio of forest rent evaluating the efficiency of their consumption to forest rent for the base assortment.
In the presence of assorted tax factors, the problem of determining the tax rate for the basic assortment (base rate) is solved.
The basic forest tax rate is determined based on the tasks of the budget system for the receipt of financial resources from the use of forests in it with the intended purpose for:
▪ state forest management,
▪ reproduction, conservation, and protection of forests taking into account the involvement of extrabudgetary sources of covering standard costs,
▪ scientific, educational and innovative development of the forest sector.
The value of the basic tax rate is established by dividing the state assignment for the receipt of financial resources from the use of forests in the budget by the number of works when multiplying the volume of counted logs of Roundwood by their tax coefficients obtained by the rental method for assessing wood resources.
The basic tax rate and assorted tax ratios are developed by the Government of the Russian Federation and approved at the legislative level.
Forest tax rates can get different values when using Roundwood in the domestic and export markets. In the second case, the forest tax will serve as a customs duty, regulating the export of Roundwood, expanding or, conversely, limiting its export resources.
Managing export of Roundwood through the forest tax mechanism removes a solution to this problem from the jurisdiction of the WTO. The forest tax, like other taxes, along with fiscal functions can have a stimulating effect on the process of innovative development of the forest sector, in particular:
▪ integrated wood processing with the development of non-waste technologies,
▪ expanding the availability of forest resources for their economic development.
At the same time, tax incentives should not be “tied” to Roundwood logs, but to legal entities and individuals using forests for logging. The forest tax in the interaction of financial authorities, including the tax service, with state authorities in the field of forest relations at the federal and regional levels can not only put up barriers to illegal timber circulation, remove corruption risks, but also create a basis for balancing the interests of all parties in the system public-private partnerships in the forest sector.
Professor, Doctor of Economics,
Honored Scientist of the Russian Federation