Impact Of Taxes On The Profitability Of Industrial Forest Plantations Privately Owned In Galicia

The area planted with Eucalyptus nitens has increased greatly in Galicia in recent years. However, the expansion of these plantations has not been accompanied by economic studies. The objective of this study was to quantify the influence of taxation on the economically optimal rotation and on the profitability of the plantations. In short, we considered various scenarios: two types of ownership (private property and communal forests); inclusion or not of carbon sequestration projects; and consideration or not of the taxation associated with plantations. The results show that for intermediate productivity of this species, the plantations are economically viable and that the economically optimal rotation is very close to 14 years in most of the scenarios considered. Consideration of taxation had a contrasting opposite effect on privately property and collective property. Finally, the inclusion of projects associated with carbon sequestration scarcely modify the initial rotation, but substantially increase the profitability of the plantations, especially in communal forests, which are subject to the taxes considered in the analysis.