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Large logging companies getting away with non-payment of import duties

CUSTOMS, which always tops the government’s revenue collection every year, is allegedly allowing large logging companies to get away with non-payment of export duties, sources in the logging industry have revealed.

The sources said the practice is widespread based on what they described as “inducement dependency syndrome”.

“What it is that large logging companies simply issue Customs a cheque as surety for a shipment to go with the promise that once the letter of credit (LC) is received, payments would be made to Customs.

“But in almost all cases this was never done. Instead, these companies simply repeat their undertakings to pay but that is all it gets to. In doing this, Customs is allowing these companies to deprive the Government of much-needed revenue,” the sources said.

“One company has now accumulated more than $11 million in unpaid export duties to the government,” the sources said.

“It is affecting government revenue very badly because if one large company had accumulated more than $11 million in unpaid export duties, just think of how much all the large companies put together,” they said.

But, a spokesman for the logging industry’s regulatory body, Solomon Forest Association (SFA) has dismissed the report.

“That’s impossible because once you’ve done that your next shipment would not be allowed to leave,” the spokesman said.

Revenue collection by the Customs Division of the Ministry of Finance and Treasury was said to have suffered a major setback in its revenue collection projection in March.

It collected just $20 million, a short fall of $8 million.

The sources said collection was weak because of the inducement dependency syndrome.

“Unless Customs puts its foot down, this would be the new trend, which would be detrimental to government revenue collection,” the sources said.