The Kenya Forest Service (KFS) has recently announced a significant increase in timber permit fees, sending ripples through the timber industry and other affected sectors.
Taking effect from July 13, 2024, the cost of acquiring movement permits for transporting timber increased from Sh2,000 to Sh25,570.
A breakdown of the new fee structure includes a consignment fee fixed at Sh20,000, the movement permit fee itself which remains at Sh2,000, a VAT of 16% on the fees amounting to Sh3,200, an additional VAT of Sh320 as well as Sh50 service transaction fee that will be charged on the E-Citizen platform, which will be the exclusive method for processing these payments.
This is to ensure efficiency and transparency in the permit acquisition process.
This sharp increase will undoubtedly have far-reaching implications for businesses reliant on timber, such as the construction and furniture industries, where timber serves as a vital raw material for various products.
However, the KFS has justified these fee adjustments by citing the necessity of sustainable forest management practices. By implementing these changes, the KFS aims to regulate and monitor timber transportation more effectively, ensuring the responsible utilization of forest resources.
In addition, the KFS new fee structure is also expected to affect the transportation of charcoal and other non-wood forest products. Transporters involved in moving bags of charcoal will now encounter a fee of Sh30 per bag, in addition to the 16% VAT while for non-wood forest products, the fee is set at Sh2 plus the 16% VAT. Furthermore, they will both be required to pay the Sh50 eCitizen fee per transaction.
The new changes will see the affected parties have to adjust their financial plans to accommodate the increased costs of timber transportation. The potential impact on consumer prices and the overall market dynamics remains to be seen, as stakeholders navigate these new developments.
This announcement follows a recent KFS directive prohibiting the grazing of animals in specified areas and the introduction of zoning regulations which include forest zonation and mapping to designate specific forest areas for grazing, as outlined in the Participatory Management Plans concerning the forest station (PFMP).
While the repercussions of the increased fees may present challenges for the timber industry, the long-term benefits, according to KFS, will ensure responsible utilization of forest resources which are invaluable for the preservation of Kenya’s natural ecosystems.
