Deputies of the Leningrad Region asked federal authorities to reduce financial burden on local harvesting businesses

A message to this effect has been sent to Mikhail Mishustin, Chair of the Government of the Russian Federation, as reported by Rossiyskaya Gazeta (“Russian Newspaper”) referencing the press release of the Legislative Assembly of the Leningrad Region. After lengthy COVID-related restrictions and the imposition of anti-Russian sanctions, the industry finds itself in a dire economic situation making state support measures necessary, the message says.

Most harvesting enterprises operating in the region used to export up to 90% of their products. Now, when European markets are not available to Russian entrepreneurs, rebuilding the timber industry economy entails considerably higher costs while the requirements of the timber legislation remain unchanged. That is why deputies consider it reasonable to extend the term of the reduction factor applied to calculating the rent for forest areas. This measure was introduced across the Northwestern Federal District in 2023, and an extension to 2024 and 2025 is now suggested.

Besides, the rate per unit of volume of unprocessed wood and per unit of area of a forest area stipulated for the Leningrad Forest Tax District is significantly higher than in other parts of the Northwestern Federal District. This used to be justified “by the geographical position of the Leningrad Region and the proximity of sales markets for timber industry products in this export-oriented region”. The situation has now changed, so the rate needs to be adjusted.

At the same time, deputies addressed Alexander Drozdenko, Governor of the Leningrad Region, asking him to provide regional-level support to harvesting enterprises. In 2022 and 2023, lessees of forest areas were granted a deferral on paying the part of the rent intended for the regional budget, i.e., exceeding the minimum amount. The Legislative Assembly now suggests introducing a full one-year moratorium on paying “the regional part” of the rent for forest use.