The deduction will become BGN 1 per cubic meter for the 5 enterprises and BGN 4 for the South Central enterprise, with previous values of BGN 2 to BGN 8
With a draft Decree for the addition of Decree No. 343 of the Council of Ministers of 2011 on determining the amount of the part of the sale price of wood and non-wood forest products MFA offers reduction on the size of deductions to fund “Investment in Forests”.
So far, the payments for this fund by the buyers have been BGN 2 per cubic meter of wood – for “Northeast State Enterprise”; BGN 4 per cubic meter of wood – for “Northwest State Enterprise” and “Southeast State Enterprise”; BGN 5 per cubic meter of wood – for “North-Central State Enterprise” and “Southwest State Enterprise” and BGN 8 per cubic m of wood – for “South-Central State Enterprise”.
The new proposal is for the 5 of the state-owned enterprises to make the amount 1 BGN per cubic meter of wood, and for the South Central Farm – 4 BGN, i.e. half. It is proposed that the reduction be applied temporarily – for six months – in the period October 1, 2024 – March 31, 2025.
The reason for the changes is the significant decrease in wood prices in the current year 2024 due to complex reasons – the influence of the European markets and the drop in demand for wood products on international markets and for firewood by individuals for personal needs in the country, states in the reasons for the project.
The decline in consumption, respectively the demand for wood, led in 2024 to the termination of a large part of the concluded contracts for the sale of wood at high prices reached after competitive procedures by the state-owned enterprises and their territorial divisions. The lack of participants in a number of sales auctions has necessitated a reduction in the initial sales prices of wood offered by the state forestry and hunting farms, between BGN 10 and 30 per cubic meter for the various assortments and types of wood.
For 2023, the reported decline in wood sales from the six state-owned enterprises is 19% compared to 2022, and by the first nine months of 2024 – by another 7% compared to the same period in 2023.
The reduced extraction and realization of the wood harvested from the state forests, combined with the decrease in the selling prices of the wood in 2024, has worsened the income to the enterprises.
As of 30.09.2024, four of the six state-owned enterprises report an interim financial result of a loss in a total amount exceeding BGN 4 million.
The changes in the decree are expected to stabilize the wood market and the financial situation of the enterprises.
It is proposed that the reduced amount of deductions for the Investment in Forests fund be the same for the sale of any timber, including standing root for individuals, spruce or broad-leaved timber damaged by abiotic and biotic factors and impacts. . It is proposed that for the period from 01.10.2024 to 31.03.2025 the amount under Art. 1, para. 2 of Decree 343, which is for standing root wood sold to individuals for personal use, as well as for timber and non-timber forest products. The other proposal is to drop it under Art. 1, para. 3 the deduction for the sale of hardwood damaged by abiotic and biotic factors.
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