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Abstract
The paper deals with issues of taxation in relation to decentralisation of forest resources. It
presents preliminary empirical data from Tanzania in the form of forest taxation records from
12 villages that have gained jurisdiction over forest products taxation through a
decentralisation reform. The analysis shows that (i) decentralisation of forest resources can
lead to vast improvements of taxation effectiveness and (ii) taxation of forest products may
be regressive or progressive in relation to income distribution. Thus, the effects of increased
forest taxation effectiveness on poverty alleviation are ambiguous and highly dependent upon
the local pattern of forest utilisation. The indication that forest decentralisation can lead to
higher effectiveness in the taxation of forest products contradicts some of the general debate
on the effects and potentials of decentralisation on taxation, and, hence, provides an argument
for continued decentralisation of natural resources.