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HONIARA, Solomon Islands (PFnet, Jan. 3) - The Minister of Finance and Treasury, Hon. Gordon Darcy Lilo, announced [yesterday] an increase in the determined prices used to calculate the export duty of round logs.

The new determined prices have increased by about 30 percent to reflect the rise in international log prices over the recent years. This increase is expected to result in a substantial increase in export duty revenue.

"This is the first time that determined prices have been revised since 2003. The old prices were out of date and as a result, Solomon Islands were losing precious export duty revenue," the Minister said. "This change means that Government revenue may rise by around SB$40 million [US$5.7 million] per year. This is revenue that the Government will use to provide services to the community and achieve our rural development goals and aspirations," the Minister added.

Mr. Lilo made his decision based on advice from the Comptroller of Customs and the Commissioner of Forests.

"My decision is based on careful analysis carried out by the Customs and Forestry Department. That analysis showed that average prices for round logs are much higher than the old determined prices," the Minister said

In future, reviews of the Determined Price mechanism will occur on a quarterly basis and determined prices will be adjusted to reflect movements in international log prices.

The Finance Minister said he understood that this was a big adjustment for the forestry industry.

"Determined prices have not been updated for so long, hence we now need a large increase to reflect changes in market prices. Forestry businesses, in this regard, have accumulated many benefits over the years from low determined prices and low duties, Mr. Lilo said.

According to the Central Bank, forestry provides almost 65 per cent of Solomon Islands export income and just under 15 per cent of the total production of the economy. Natural forests are expected to run out within the next five to seven years. The Central Bank and many reputable institutions have expressed concerns that this rate of logging is unsustainable.

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