Timber import struggling to take off amid shortage

Two months after the government issued the notification approving timber import along with the import guidelines, no headway has been made as yet.

Ministry of Economic Affairs is still stuck with the most fundamental issue of who should be eligible for the import.

Senior forest officer of Forest Resources Development Division, Ugyen Tenzin, said the delay in implementation of the timber import rule was caused by a clause which says that any agency or individual can import timber for personal or commercial purpose.

Observers say that the government’s oversight of this basic criterion is costly in terms of time and efficiency.

The economic affairs ministry has apparently said that timber import should be allowed only for those who hold a valid trade licence.

Although the trade director general has not been informed on the issue, he said that for any import from countries other than India, an importer has to be registered. “We are the final authority to issue import licences, and we have no problem in doing that,” said Director General Sonam P Wangdi.

He added that ideally, an importer must have a trading licence and the imports must comply with the system in place.

The decision on the eligibility for timber import is yet to be made. “We will soon hold a meeting and sort out as to who should be eligible,” said Ugyen Tenzin.

Meanwhile, some potential importers are considering many issues related to timber import. Some say timber import is impossible if the government does not provide hard currency.

Gyem Tshering, the chief executive officer of Natural Resources Development Corporation Limited (NRDCL), said lately many countries have restricted timber export in response to climate change.

He added that timber import could be a difficult issue as it entails the need to look into cost effectiveness and species to be imported, among others.

Ugyen Tshechub Dorji, a businessman who has applied for a licence to start a timber import company, is still unsure. He said, “Unless the government agrees to provide hard currency, there is no way we can import timber.”

Importing timber in huge quantities will require a large amount of foreign currencies, which private companies cannot get on their own. However, the government is already in short supply of foreign currencies.

Some wood-based manufacturers, meanwhile, do not know much about timber import.

RL Bhura, the general manager of Bhutan Wood Panel Industries (BWPI), said it is good that the government has decided to allow timber import, but a feasibility study needs to be done before the import begins.

“We will have to club the requirements of all the manufacturers together because we cannot import timber individually, and we also need to make arrangements for storage facilities,” he said, adding that there also needs to be clear-cut details on custom duties.

BWPI requires mostly broad-leafed and pine timber for construction of houses and plywood manufacture. “The present system is ‘totally unfit’ for manufacturers,” said RL Bhura.

The CEO of Woodcraft Centre in Thimphu, Pema R Rinchen, said the centre is considering importing timber but the tax is too high.

The government has decided to levy an import duty of 10 percent for timber import. Ugyen Tenzin said that 10 percent is the minimum tax, and the government cannot afford to waive it. “When we interviewed the wood-based industries, they said they could pay the taxes provided that they have enough supply,” he said.

Pema R Rinchen said the wood-based industries are facing great difficulties because they don’t have saw mills of their own. Therefore, they have to go through the usual process to get timber.

According to Ugyen Tenzin, at least 400 people from across the country have applied for timber. He said the division needs to verify and check whether the requests are genuine before supplying timber.

By Pushkar Chhetri