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Liberian Government or as the result of the reporting of losses
sustained by them. See Annex 18. Most concessionaires which
submitted income statements reported heavy losses which in most
cases were due to (i) an understatement of sales prices and
(ii) heavy deductions from gross sales revenues for capital and
operational expenses. The Liberian Government failed to react
adequately - just as in the case of the obligation to process
a fixed portion of the production locally (see above).
Consequently, tens of millions of dollars of potential revenues
were lost. As corporate income tax payments have thus been
negligible, stumpage fees formed the most important source of
government revenues from the logging companies, land rentals
being relatively low.
Since 1973 each concessionaire is required to pay an annual
surface rent of generally 10 i per acre on "all land held by
the concessionaire", Only some concession agreements state
different rates which, however, depend on specific conditions and
apply mainly to wood processing industries. This has not always
been the case. The concessions initially granted (i.e. in the
195O's, 196O's and the early 1970's) required the payment of
surface rentals which were the outcome of a bargaining process
rather than the application of a fixed (uniform) tariff. Also
before the introduction of the Model Timber Concession
Agreement in 1973 there was a tree-marking fee of 10 4 per tree
which however was collected in lieu of surface rental and only
in case of any (concession) operation in a "salvage area".
Early 1978 the amount due from 39 companies for surface rentals
was estimated by the Ministry of Finance at % 887,882.57 (54).
Stumpage Fee Policy
Stumpage fee policy and policy application are thus very important
and have determined the Government's intake from the forestry
sector. The rates introduced by the 1957 Supplementary
Act remained unchanged until the early 1970's. It was only under
the Tolbert Administration that an important revision of these
stumpage rates (which did not differentiate according to the
tree species and their values) was made - in the latter part of
1972. The fees were then set at:
(a) $ 10 per 1000 bd.ft. or $ 2.88 per m3 for class I
(b) $ 7 per 1000 bd.ft. Or % 2.02 per m3 for class II
(c) $ 6 per 1000 bd.ft. or % 1.73 per m3 for class III
(d) $ 5 per 1000 bd.ft. or % 1.44 per m3 for class IV
(e) $ 3 per 1000 bd.ft. or $ 0.86 per m3 for class "Local".
Finally, a great improvement was introduced, effective June 1,
1973, when the stumpage fees were changed from this fixed-rate
system per class to a scale based on the species, its price on
the world market and its end use (55). Since that year, the
stumpage fees rates have been periodically adjusted. As of