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.