The Finnish government has announced its intention to offer tax relief for sales of protected forest areas. The proposal follows swiftly on from the government’s recent decision to cut taxes on the sale of domestic logs by 50%.
Under the proposed legislation, forest sales to the government for nature preservation purposes would be exempt from capital gains tax. The government’s rationale is that such a move would considerably increase sales of protected areas in the same way as cutting tax on logging. Further discussions will be held during the government’s budget process in the autumn.
Meanwhile, Finnish paper makers are warning they will shut down more mills if forest owners do not increase the amount of raw lumber they sell. Finnish paper firms are suffering from a lack of raw material as a result of Russia’s rising export duties.
“Because of the wood shortage, all mills cannot be kept running,” Anne Brunila, the head of the Finnish Forest Industries Federation, said in a statement. “If timber sales do not rapidly increase to August levels the industry has to accommodate its production to raw material supply.”
As a result of government tax incentives, wood sales in August were 5.3 million cubic metres – more than twice the August average in the past 10 years. However, it fell to one third of last month’s level in the past two weeks, the organisation said.
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