TAXATION OF FOREST RESOURCES IN UKRAINE: PROSPECTS FOR IMPLEMENTING THE EXPERIENCE OF THE SCANDINAVIAN COUNTRIES

Abstract

It has been established that the existing system of taxation of forest resources in Ukraine primarily serves a fiscal function and is characterised by numerous inconsistencies in the differentiation of royalty rates for the special use of various components of forest resource potential. Based on research into best international practices regarding fiscal impact on the forestry sector, it has been established that the forest resource taxation models of Norway, Sweden and Finland are characterised by a high degree of balance. It has been found that a distinctive feature of the Scandinavian model of forest resource taxation is the maintenance of a balance between the economic efficiency of timber harvesting, the preservation of the sustainability of forest ecosystems, and the significant impact of the economic development of forest resource potential on the social well-being of residents in local communities. They are the main areas where forest resource benefits are concentrated. It is argued that certain elements of the Norwegian model of tax regulation of forestry should be implemented in Ukrainian forest resource taxation practice, in particular, a system of tax incentives for financing investments in forest roads, financial and investment support for measures to adapt forestry to climate change, and investment in projects to protect forest biogeocenoses from natural disasters. It has been found that, with a view to implementing the taxation of forest resources in domestic practice, it is advisable to take into account the Swedish model, which offers a number of advantages 1) the provision of special tax relief for small-scale forest owners; 2) tax exemptions during the early stages of stand growth; 3) the use of instruments to incentivise measures for the greening of forestry. Research has shown that, in the context of developing a roadmap for the transformation of the forest resource taxation system in Ukraine, it is advisable to utilise elements of the Finnish model, particularly regarding the application of alternative taxation options. They are: 1) taxation of the difference between income and expenses from timber sales; 2) taxation of normative income as a percentage of the value of forest stands. It has been established that a key strength of the Scandinavian model of forest resource taxation lies in the use of instruments to stimulate the development of the small-scale forest owner sector.