Minister Väyrynen: ”Tax relief plan better than refund scheme”
Press Release 265/2008
24 july, 2008
In a public statement, Minister for Foreign Trade and Development Paavo Väyrynen defends the temporary tax relief plan in the wood trade. He justifies the plan with the ongoing wood tariff negotiations:
”Because of the delays to find a solution to the Russian wood tariff issue, Finland has had to consider all possible solutions in order to ensure sufficient wood supplies for the industry.
A temporary tax relief for wood sales is clearly a better alternative than granting refunds of wood tariffs to the industry. The refunds would enable the cointinuity of the wood import from Russia even after the higher export tariffs enter into force, whereas tax reliefs increase the use of Finnish wood which benefits the Finnish economy and employment. The tax reliefs and the refund scheme would have an almost similar effect on the Finnish economy.
If a solution to the Russian WTO membership could be reached this year, the increases in the export tariffs at the end of the year would not become effective. With Russia in the WTO, the export tariffs could be agreed on and they would probably be lower than now. If the negotiations are delayed, the higher tariffs will enter into force at the end of the year, but if Russia becomes a WTO member later on, the tariffs will then decrease.
Finnish wood will have a higher demand than usual on the market if the higher export tariffs enter into force at the end of the year. If Russia becomes member of the WTO, the tariffs will be reasonable enough to start importing wood from Russia again. Now that there are no solutions yet, this tax relief plan will be an excellent solution.
The Finnish Government aims at replacing the imported wood with Finnish wood as much as possible and on a sustainable basis. A long-term replacement of the Russian birch fiber with Finnish wood is not possible, but this can possibly replace the Russian wood during a year or two. We should especially get more birch fiber to the market at the moment.”
More information: Special Adviser to the Minister Ossi Martikainen, tel. +358 40 592 6769