2 DESCRIPTION OF THE FOREST REVENUE SYSTEM

2.1 Charges on roundwood production

Land ownership in Namibia is mainly divided into two major categories, namely freehold and communal land (see Table 1).

Table 1 Land area by type of land tenure

Freehold land covers about 362,000 km² (44 percent of total land area) and is divided into 4,200 large-scale farms (the commercial farming area). The woody vegetation on commercial farms plays a very important role in providing both the habitat and fodder for wildlife. Tourism, indirectly linked to the woody vegetation, is also an important activity in the commercial farming area and in the proclaimed national parks.

Commercial and large-scale harvesting of wood (even for own-use on privately owned farms) is regulated, using forest permits and farm inspections by the government through the DoF. Farmers pay charges to the government when they harvest forest products (see Appendix 1 on page 27). There are no land taxes for farmers, but the government is now in the process of introducing a Land Tax Bill.

Communal land covers about 335,400 km² (41 percent of total land area) and is owned by about 138,000 households. Access to resources on communal land and other government proclaimed land (owned by the state) is free and authorized by traditional leaders. Traditional leaders (chiefs and headmen) are also responsible for allocating communal land to individuals. There are no land taxes on this land, but the government collects the same charges (as above) for harvesting forest products on this land (See Appendix 1).

Within the communal land, the DoF has also set aside one State Forest and four Community Forests (see Table 2). These protected forests account for just under two percent of the communal land area. The use of forest resources in these protected forests is also subject to the government tariffs for harvesting forest products (See Appendix 1).

Table 2 Protected forests

Protected areas cover about 126,600 km² (15 percent of total land area). These areas include game parks (such as Etosha National Park and West Caprivi Game Park) and the diamond mining area along the Atlantic coast.

At present in Namibia, there is still no organized forest management. Forest management plans for all forms of forest ownership in Namibia are non-existent. However, starting in August 1997, the DoF is implementing components of the Namibia-Finland Forestry Programme. The overall Programme objective is to ensure an increased role of forestry in the socio-economic development of Namibia through continuous implementation and development of sustainable forest management practices.

One of the programme components is community level forest management, which is to formulate applicable models of sustainable integrated forest management to be implemented on communal lands by Namibians. This component aims at direct involvement of local communities in forest management.

Although traditional leaders allocate land for various uses in communal areas, they do not carry out forest management as such. This is still the mandate of the DoF. However, the DoF is in the process of devolving to communities the power to manage their forests. The new Forest Act 1998, which is still undergoing the formal approval process, takes such issues into account.

The government will initially meet most of the costs of forest management by communities. However, in the long run it is envisaged that the local communities will devise various income generating activities to meet both their income needs and the costs of managing their forests.

2.2 Charges on the production of non-wood forest products and services

2.2.1 Non-wood forest products

Non-wood forest products (NWFPs) play a major role in the lives of the majority of rural Namibians. However, the use of NWFPs is not yet reliably quantified. Data on the total level of NWFP production is non-existent, as is data on the total income and expenditure in this sector.

At present, most NWFPs are collected free of charge, but charges are levied on commercial production of the following NWFPs: grasses; reeds; Makalani palm leaves; and ornamental dry roots. The charges on the collection of these NWFPs are given in Schedule D of the list of forest products tariffs (see Appendix 1). It is not possible to identify the revenue collected from each individual charge on NWFPs, but they are included in the totals for “various permits” shown in the tables later on in this report.

2.2.2 Charges on the use of forests for other commercial services

Even though woody vegetation in the commercial farming area and game parks is an important resource for tourism, statistics are not readily available about the total revenue collected from the use of forests for services such as ecotourism, hunting and wildlife. As a very rough estimate, it is suspected that total revenue collected from these activities could be slightly higher than those collected by the DoF.

Table 3 shows the level of charges collected for permits issued to operators in the wildlife sector. These charges are paid to the Directorate of Specialist Support Services in the Ministry of Environment and Tourism.

Table 3 Charges for issuing permits in the wildlife sector

2.3 Charges on processed product production

In Namibia, there are various companies involved in the production of processed forest products (i.e. sawnwood and wood based panels). There are no direct charges levied on the production of processed forest products. However, the government levies a general sales tax on consumers (of eight to ten percent) when they purchase processed forest products and the government has now introduced a system of Value Added Tax (VAT), which is assumed to be a much more efficient tax system. Data about the collection of these taxes specifically from forest products is not available.

2.4 Charges on forest products trade

2.4.1 Domestic trade

The only charge on domestic trade in forest products is a modest fee for issuance of a marketing permit in Schedule E of the list of forest products tariffs (see Appendix 1).

2.4.2 International trade

Namibia imports various forest products, such as: roundwood; sawnwood; wood based panels; and pulp and paper. Import duties are levied on these products when they enter the country and these duties are paid to the Ministry of Finance. It is not known how much was paid to the Government as duties on these imports.

According to sources at the Ministry of Finance, exports of forest products are not taxed. However, the DoF issues permits for exporting forest products and these are shown in Schedule E of the list of forest products tariffs (see Appendix 1). Information about the total amount of charges collected from permits for international (and domestic) trade is unavailable, but they are included in the totals for “various permits” shown in the tables later on in this report.

2.5 Other charges

2.5.1 Fines or penalties for breaking forest laws or regulations

The Forest Act of 1968, the new draft Forest Bill of 1998 and the Nature Conservation Ordinance all protect natural flora and fauna and the physical environment in general (and trees in particular). The 1968 Forest Act, which is currently in force, stipulates fines and penalties for breaking forest laws and regulations. An admission of guilt results in fines ranging from N$ 100 to N$ 200 per offence. However, for cases that go to court, magistrates can impose high fines and penalties. These fines are certainly not adequate to discourage the violation of forestry laws and regulations completely and they could be increased.

2.5.2 Other fees for the use of forest land

Fees could be levied for the use of forest land (e.g. cattle owners could be charged for grazing rights in state forests), but there are currently no such arrangements. The only example of this occurs in Katima Mulilo Forestry Office, which rented an old sawmill shed to the agricultural farmers union for maize storage (see Table 7).

2.5.3 Other requirements that can be considered as a charge on production

There are no charges or requirements that forest operators should contribute to village development or provide infrastructure.

2.5.4 Other innovative revenue raising schemes

Namibia’s forests provide great social benefits in terms of: conservation of biodiversity, soil and water resources; maintaining water catchments; and in acting as carbon sinks. However, these benefits are unquantified and, at present, there are no schemes to raise revenues to support such functions.

Tourism is one of the most rapidly expanding sectors in the Namibian economy and it is based largely on wildlife located within and supported by savannas and woodland. Tourism provides a source of human recreation and generates valuable foreign exchange. In addition, it provides some revenue to government from permit fees (See Table 3).

The government recognises the opportunities for ecotourism offered by wildlife. In addition, cultural tourism (as a component of ecotourism) is still only in its infancy in Namibia, particularly in the Northeastern regions. In view of the government’s commitment to develop the tourism industry, ecotourism has a bright future to continue to flourish and expand.

The promotion of tourism and ecotourism depends on sustainable management of the forest resource for biodiversity conservation. However, at present, information about the level of government revenue raised from ecotourism development is unavailable and the DoF, as stewards of the forest resource, do not collect any revenue from these types of development.