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Good practice Imported

Serbia's Forest Use Compensation & Budgetary Forest Fund

Serbia · Belgrade · See the Serbia profile · See the Belgrade profile

Evidence: Descriptive / self-reported Top 81% 33/100 · Ask Evidence Copilot about this practice

Serbia's Law on Forests levies a minimum 15% charge on the market value of harvested timber, split 70/30 between the national and local budgets, feeding a ring-fenced Budgetary Fund for afforestation, forest improvement and disaster recovery.

15 % of market value of felled timber
Minimum forest-use compensation charge
70 %
Revenue share to national budget
30 %
Revenue share to local self-government budget

Details

Maturity
Established
Promoter
Government of the Republic of Serbia — Forestry Directorate (Uprava za šume), Ministry of Agriculture, Forestry and Water Management
Period
2010-present
Keywords
forestry finance, earmarked levies, afforestation, public forest law

Context

Serbia's Law on Forests (Official Gazette of RS Nos. 30/2010, 93/2012 and 89/2015), Articles 77-84, establishes a compensation charge ('naknada za korišćenje šuma i šumskog zemljišta') payable by all users of state and private forests, calculated as a minimum of 15% of the market value of felled timber assortments at the place of cutting.

Objectives

The mechanism is designed to fund long-term, sustainable forest-management objectives by ring-fencing part of the compensation revenue in a dedicated Budgetary Fund for Forests, rather than letting it enter general government revenue.

Activities

Article 82 splits the compensation revenue 70% to the Republic of Serbia budget and 30% to the local self-government unit where the felling occurred (Article 84 applies the same split in the autonomous provinces). Article 88 mandates that the Republic's ring-fenced share finance afforestation of new forest land, tending and improvement of existing stands, construction of forest infrastructure, preparation of forest-management plans, and recovery after natural disasters such as fire, storm or pest outbreaks.

Conclusions

The statutory rate, the 70/30 split and the Fund's earmarked legal purpose are set out transparently in law, giving the mechanism unusually auditable governance for a national forestry levy. No independent, quantified ex-post evaluation of ecological outcomes — hectares afforested, carbon sequestered, erosion avoided — attributable specifically to the Fund's spending was found in publicly available sources; the mechanism mirrors similar 'general beneficial functions of forests' levies inherited from former Yugoslav forestry law in Croatia and Bosnia and Herzegovina.

Implementation
Indicative cost
High (€500k–€5M) — Self-financing through the compensation charge itself (minimum 15% of felled timber's market value); no independent figures on the Fund's total annual collections or expenditures were found in public sources.
Time to results
Long (> 3 years) — Established under the 2010 Law on Forests, amended in 2012 and 2015; the compensation mechanism and Fund have been continuously in force since 2010.
Staffing & skills
Forestry Directorate (Uprava za šume), Ministry of Agriculture, Forestry and Water Management, local self-government units administering the 30% local share

Conditions for success

  • consistent enforcement of the compensation charge across all state and private forest users
  • effective ring-fencing to prevent the Fund's revenue being absorbed into general budget spending
  • local government capacity to deploy the 30% share on forest-relevant works

Common failure modes

  • no public, independent performance audit of the Fund's actual spending against its statutory mandate was found
  • earmarking in law does not by itself guarantee measured ecological outcomes

Where it fits

Governance type
national statutory levy with an earmarked public fund
Scale
national, with a local budget-sharing component
Income level
upper-middle-income (Serbia)

Commonly funded by

National / regional programmes

Indicative funding routes for practices of this type — always check each programme's current calls and eligibility rules.

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Data sources

Where this practice's information was retrieved from, and when.

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