The purpose of this research is to find out problems of forest taxation in Japan, and to suggest its improvement. The study was carried out throuth investigation of the process of historical changes, the actual conditions of tax burden, and comparative study with other countries. From the main results of this study, it was concluded that the current forest tax system cannot cope flexibly with the structural changes of forest management. Its main reasons are resulted from that the standard deduction of management cost on the basis of historical individual cost is calculated much less than actual real cost in case of forest income tax, and for forest inheritance tax, tax values of forest under present system on the basis of market price exceeds forest values with consideration of net income from its use. With respect to the improvement of forest taxation, the results from empirical and theoretical study show that forest management of Japan must be regarded as business management rather than assets maintenance itself, this standpoint is able to be inferred by logic of present forest tax system. In concrete terms, taxable income must be calculated on the basis of annual cost in case of forest income tax, and for forest inheritance tax, tax values of forests have to be determined as capitalized income values. This results not only from the ability-to-pay principle but is substantiated as well by relevant objectives of forest policy.