Taxation and investment implications of non-industrial private forestry within a Boreal Swedish municipality

The Swedish tax system affects distribution of forest revenue between national, municipal and individual interests. The study reported here takes a Boreal municipality perspective, with the objective of investigating the tax and investment implications of non-industrial private forestry (NIPF) in a case-study municipality at these three interest levels. Sales revenue, operating costs, investment, disposable income and direct tax revenue generated in NIPF within the boreal municipality are quantified, drawing on income tax return data. The question addressed is, does NIPF contribute to the local economy and thereby to development and maintenance of infrastructure in a typical boreal municipality, given the present NIPF ownership structure and tax system? Results support two different views. On one hand, tax revenues generated from NIPF to the resource municipality amounted to only 17% of the direct tax revenues or less then 1% of the tax revenues in the municipality budget. On the other hand, NIPF owners returned as much as 72% of sales revenue back into their firms in form of operating costs, and 20% in from of investments.