Browsing by Subject "verotuki"

This study introduces a new policy instrument called Forest conservation tax deduction. Finnish Forest Industries Federation (FFIF) has presented the Forest conservation tax deduction at the idea level. The aim of the Forest conservation tax deduction would be to encourage forest owners to voluntarily conserve applicable parts of their forests for a fixed duration in exchange for compensation. Compensation for forest conservation comes in the form of a tax deduction that can only be taken out from taxes directed at forestry capital income. In this way, the instrument could work as an encouragement to increase wood supply to the market and simultaneously placing important natural sites under conservation. There is no policy instrument in Finland that would increase conservation and at the same time secure access to wood for industrial use at the time of writing this thesis. The purpose of this thesis is to present and further develop the new Forest conservation tax deduction on the basis of the proposal of the FFIF in more detail and to clarify the content of the policy instrument. The thesis examines, among other things: whether there is a need for a new instrument, whether it is legally feasible and how the instrument would work. The material for this thesis consists of the instruments and legislation currently in use. The material used is the de minimis regulation, environmental support aid of the Temporary Act on the Financing of Sustainable Forestry and forest gift tax deduction. The new instrument is based on the instruments currently in use and the research method is to present the operation of the new instrument through the application of the instruments currently in use. The current environmental support aid for voluntary temporary protection suffers from an under-budget and low human resources. Monitoring the effectiveness of this policy has also shown that the forest owners have often conserved a target area without compensation. For these reasons, it is important to assess whether the current instrument achieves its objectives in a cost-effective way for the society. In addition, the legislation of the current instrument is temporary and will require the approval of the European Commission after the end of its term. Forest conservation tax deduction is proposed to be a permanent and continuous form of preservation regulation. This instrument could also be used in future to ease safeguarding forest species in need of temporary protection. The instrument is proposed to be based on a de minimis regulation which consecutively does not need to be approved by the European Commission. This in turn would reduce the amount of bureaucracy involved. The Forest conservation tax deduction is a legally feasible instrument. This thesis demonstrates that Forest conservation tax deduction is a potential policy instrument for temporary protection. However, the introduction of the instrument as an active regulation would require further study, as the instrument and its operation are considered only at a general level. The details of the tax aid are left largely open and therefore require further work. The thesis has not examined the cost-effectiveness of the new instrument and therefore does not compare this aspect to the current active instrument. The thesis also does not examine how Forest conservation tax deduction as a policy instrument affects the timber trade and forest protection. These should be taken into account in future study. A regional experiment would also provide a better understanding of forest owners' attitudes towards the instrument.