Why are plantations subsidised by tax payers?
Plantations are treated the same as any other agricultural crop for the purpose of taxation. The costs of establishing the crop and the interest and rental paid on the investment in cropping are deductible expenses. The income from the crop when harvested is taxable. Profitable crops are therefore net contributors to public revenue. There is no compensation or indexation of costs over the life of the crop. Because forest crops often involve a long period between establishment and harvesting there is an opportunity to delay a tax liability by off-setting the cost of establishment of a forest crop against other taxable income. However, at the end of the crop tax will be payable on the revenue from the crop. There is no tax subsidy on plantations.
