Cameroonís forest sector is of great national importance, accounting for 25% of exports in 1998/99. This paper looks specifically at how the forest taxation system can benefit local communities. It begins by outlining some of the changes the sector has seen since the passing of the 1994 Forest Law, and the ban on log exports in ???. These have included an unprecedented expansion in primary processing activities which, alongside the decline in forest formally available for logging, has led to a large increase in illegal logging.The paper outlines two types of decentralised taxes that are intended to contribute to local development. Although not important in absolute terms, the decentralised portion of tax is significant at local level, amounting to up to three times the annual local council grant on a per capita basis. The annual royalty for forest area (RFA) is applied in concessions and 50% is destined for local councils, with 10% going to the forest-adjacent communities. The so-called ëCFA 1000 taxí is only applied in the much smaller Sales of Standing Volume logging permits and is destined wholly for local social projects such as schools and roads. However, neither tax is well monitored and misappropriation of funds is the dominant practice. Instead of benefiting local development, the taxes have led to undermining of traditional power structures, connivance between certain community members and loggers, deterioration in the relations between local councils and village communities, and conflict over land ownership as communities seek to extend their land in order to accommodate the more lucrative Sales of Standing Volume logging permits (rather than concessions or community forests). The major problem highlighted is one of a lack of transparency due to a lack and/or misinterpretation of information at all levels. Civil society has an important role to play in combating this lack of transparency. The paper finishes with a recommendation to establish an equalisation fund to redistribute taxes from forest-rich councils, together with an independent management of the ëCFA 1000 taxí.