No, for us here we have never had a meeting to discuss levies like service levy, registration, tax in the village or anything like that. Maybe big businessmen; but I do not know about us. (Small-scale timber trader in Iringa)
Meetings or obtaining additional information will not “resolve” the above “ambiguity,” as this will just deepen uncertainty. Notably, how ambiguity is managed is influenced by the extent to which actors’ ideas, values, and interests are represented in the formulation and development of a problem.
This paper examined actors’ engagement and deliberation in decision making regarding taxes levied on small-scale plantation forestry, with a focus on timber trading in the Southern Highlands of Tanzania. The in-depth interviews and observations explored various categories of actors involved in small-scale forestry plantations and examined the different types of taxes and levies on products from these plantations. We also assessed the degree of involvement of different actors in decision making regarding the determination of taxes levied on small-scale plantation forestry products, with a focus on the timber business. The actors involved in this subsector may be categorised into two groups: those engaged in business and government authorities. The main interests of the former are in having control over their produce (timber) and making a profit from it, whereas the latter’s interest is in ensuring that the business is conducted in a way that complies with the legal framework and, thus, enables the government to collect taxes and levies.
The findings support other research findings that royalty rates on forest produce (including timber) are determined administratively and arbitrarily, with no real recognition of market value (URT 2014). Inclusive decision-making processes could allow multi-levels of actors with different interests and experience to voluntarily work together (Emerson et al. 2012). This situation was also described by the informants in the interviews. According to the tax setting procedure, the task force that is formed by Director of Forestry is supposed to solicit views from some ‘key actors’ and benchmark with other best-practicing regional and international worldwide systems. The procedure does not specify these actors and the criteria for tax design are unclear. Fjeldstad and Semboja (2000) observed that main criterion is simply to collect enough revenues to fund a variety of services in order to enhance local development.
Furthermore, when new tax rates are enforced, information regarding these changes is not sufficiently disseminated to all actors. The first victims are those who are unclear about what they should actually collect or those actors who likewise do not know what they are supposed to pay. This phenomenon can be described as “symbolic violence” towards both the administrative staff at various levels within governance as well as in the business sector. The actors cannot work together in these types of situations (Emerson et al. 2012); rather, they become victims of top down responsibilisation (Mwaseba et al. 2020) and rhetorical strategies that cast agents as being responsible for making the “right” choices (Mustalahti and Agrawal 2020).
According to Local Government Finance Act (R.E. 2019), the ability to pay, a critical factor among taxpayers, is only discerned between the lines (Fjeldstad and Semboja 2000; URT 2019). Choi and Robertson (2014:511) claim that collaborative governance allows responsive and inclusive adaptation to the changing situation via deliberation over the different perspectives and interests. Governance structures are usually deprived of sufficient power to act when governance structures are downwardly accountable to local people (Ribot 2021). Based on this argument, democratic authorities must be both empowered and accountable. Elected local governments, if empowered and made accountable to the people, are a potential home for the participatory and democratic approaches that are promoted by many natural resource programs and projects (Ribot 2021). Both the empowerment of small-scale investors and the accountability of tax authorities are still questionable in Tanzania, with its promotion of small-scale forest investments and the development of local tax systems without consulting local actors. The business traders might pay quarterly taxes and be connected to the tax system. However, the traders do not trust and understand the taxes levied as part of the democratic governance when the tax system generally lacks downward accountability.
As a result of the multiple taxes levied on products, many local and urban-based investors in Tanzania have given up investing in tree planting, and many farmers, especially the urban-based ones, have begun to give up cultivating trees in these areas. Levies-related regulations affect all actors in the timber value chain, though tree growers are the group most affected more than other actors (Martin and Mwaseba 2021). Tree growers who are not involved in decision making about what should be charged and how much are also neither empowered nor committed to developing small-scale plantation forestry. At the same time, those who are consulted do not represent the issues of the local tree growers who actually invest in the sector. Furthermore, the decision-making process is unclear enough to ensure that marginal and subordinate groups (e.g., local farmers without their own investments but who participate as labour) have the opportunity to express their opinions in decision-making bodies.
Elected local governments could be a home for participatory and democratic approaches (e.g., (Ece et al. 2017) and could allow small-scale forest businesses to have access to political decision making over the taxies in Tanzania. However, this would require a process of social change rather than taking the form of a discrete technocratic and bureaucratic process. Nevertheless, there seems to be a contradiction: Business persons said they did not have enough knowledge about the levies, and small-scale forest investors reported that they did not know anything about the process of setting these taxes and levies, yet the administrative level claims that such information is shared and meetings are held. Even if the meetings are organized, that does not mean that the invited actors are part of the decision-making process or that their representatives are accountable.
Returning to our conceptual understanding based on Hickey and Mohan (2005) and using the empirical evidence drawn from our case study in Tanzania, we can argue that small-scale forestry has difficulties because (i) small-scale forest businesses do not have access to political decision making over taxes, (ii) local-level actors connected to small-scale forestry do not collaborate with marginal and subordinate groups, and (iii) small-scale forest owners do not seek to engage with development in a process of social change. The taxes and levies are still discussed as discrete technocratic interventions, yet collaboration between the local communities, businesses and local government could create a new form of working together to ensure justice in decisions making over taxes and levies. Participatory decision making could requires empowered citizens and accountable elected local governments but also, according to Hickey and Mohan (2005), a participatory approach to be part of a wider radical political process of change.
Concluding the key findings, various actors, most of whom are not mutually exclusive, are involved in the small-scale private plantation forestry in the Southern Highlands of Tanzania. A village-based farmer can also be a timber buyer and a government official can be both a farmer and a business person at the same time or over the course of a season or lifetime. Due to the many participating actors in the sector, the distribution of decision-making powers over the governance of the sector would require clear rules. Yet, based on the literature review and our field observations, there is limited knowledge on how different actors of the value chain interact and participate in the decision-making process in small-scale plantation forestry.
Transaction of forest products (timber) involves two types of actors – business people, and government authorities responsible for revenue collection. These two broad actors do not share a common understanding of forest product taxation issues. This is due to lack of explicit and widespread participation of business people in the decision-making process for deciding these taxes. As a result, the decision of taxation on forest products (timber) is essentially one-sided and disregards the interest of key actors, especially tax payers, causing considerable resentment among timber dealers. The critical thinking around this type of “techno-bureaucratic doxa”, nurtured in the field of forest bureaucracy, is used to legitimize the superiority of administrative power (see Ojha et al. 2009: 368) such as one-sided decisions over the taxes in Tanzania.
Globally, in small-scale private plantation forestry, there are diverse range of players involved and their interests accommodated. Rather than being isolated technocratic and bureaucratic processes, representation and accountability are crucial aspects in the decision making that underpins a process of social transformation. One-sided decision making leads to lack of collaboration and disappointment in financial performance. Based on our study in Tanzania, we argue that the engagement of the forest owners to the decision-making process for determining these taxes is needed not as form of discrete technocratic interventions but as underlying process of social change and potential home for democratic structures (see the similar finding in Ribot 2021: 510). This could build trust between local level actors connected to forest-based bioeconomy, where small-scale private plantation forest owners seek to engage with development in the local communities, district councils and further towards national level strategies of forest-based bioeconomy.
The forest-based bioeconomy plays a pivotal role in guiding the transition towards a biobased economy but it can critically be argued to be just as new type of “techno-bureaucratic doxa”. However, inclusion of actors and interactive collaborative approach in forest based bioeconomy could also offer solutions for processes of the bioeconomy transition (Mustalahti 2018:3788). As defined by Piplani and Smith-hall (2021: 3), the forest-based bioeconomy encompasses “the set of economic activities to grow, harvest, process, reuse, recycle, and sell forest products and associated forest ecosystem services.” Much of strategical and contextual understanding of forest-based bioeconomy is tailored to the European context, as evidenced by the recently developed concept of a forest-based ‘circular’ bioeconomy (see (Toppinen et al. 2020). As a result, inclusive decision making on determining timber business taxes would improve not only financial performance but would also encourage multi-level actors (farmers, business people, government and non-governmental authorities, farm coordinators, and so on) with diverse interests and experiences to collaborate to improve the entire sub-sector value chain.