The Solomon Islands Minister for Finance and Treasury, Hon Gordon Darcy Lilo, yesterday announced that the government has agreed to increase the determined value of logs to ensure it matches with the international prices our logs are receiving in the world markets.Minister Lilo said that Solomon Islands Government has made a commitment under the International Monetary Fund (IMF) Standby Credit Facility Arrangement to move to full parity with international price when applying the determined value for the logs.
It has been agreed that three equal increases - starting from 1st July 2011, one on 1st October 2011 and one on 1st January 2012 will be used to take us to 100% of the international price by the start of next year.
The average Determine Value (DV) for the first two quarters in 2011 was US$98.The proposed three-stage approach will increase the average DV to US$104.18, US$109.50 and US$114.86 respectively. This will bring the average DV to parity with the current international market price.
Minister Lilo said the Logging industry is the largest contributor to Government revenue and a key player within the economy. The Government remains faithful to its commitment to tax export round logs at a price which is representative of the true market value.
At the same time the Government remains mindful of the effects rapid increases could have on the industry and the economy, hence, the decision to spread the increase over six months.
Earlier increases in the determined value rate under the IMF program have already led to significantly improved Government revenues.
"While we need to make sure we get adequate revenue from the nation's valuable forests we also need to be sure that the determined value is a fair reflection of the international price for logs," Minister Lilo said.
From 1st of April 2012, when the current order expires, the DV will be automatically set every three months to continue to reflect 100% of the prevailing world price Solomon Islands logs are achieving.
Source: Government Communications Unit Press Release