POSTSCRIPT / May 31, 2005 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Some officials work harder than salesmen of new cars

LOVE OF MONEY: Why are some powerful officials going out of their way to kill the legitimate competitors of indentors, assemblers and distributors of brand-new motor vehicles? What drives them?

Instead of allowing market forces to operate freely and letting consumers themselves decide whether to buy new or used cars, some officials are acting like overpaid salesmen peddling brand-new models of the Chamber of Automotive Manufacturers of the Philippines Inc.

Is it out of sheer love of country that some officials have gone overboard in harassing importers of used vehicles? Or is it love of money?

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LINA ORDER: The Bureau of Customs reportedly has imposed a P500,000 tax on every imported used vehicles. Ano ba yan? These are not luxury vehicles! In one blow, the tax bloats the usual P200,000 selling price of some of the vehicles to P700,000.

The bureau is also threatening to slap hefty fines on shipping companies and carriers unloading imported used vehicles at any port in the country.

Customs Commissioner Alberto Lina ordered last March 29 vessels and other carriers not to accept right-hand-drive motor vehicles or their parts destined to any port lest they be criminally charged.

His order said RHD vehicles or their parts would not be unloaded and allowed entry. The goods intercepted would be shipped back to their country of origin at the expense of the carrying vessel and subjected to penalties.

The bureau based its decision on RA 8506, a law banning right-hand-drive vehicles on all public roads in the country.

In his excitement, somebody in Customs seems to have overlooked the fact that by the time the imported RHD vehicles are registered, tax-paid and allowed to be driven out of the Subic perimeter, they have been converted to left-hand-drive and certified as safe and smoke-free.

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CARRIERS HARASSED: Maximino Cruz, general manager of the Association of International Shipping Lines Inc., objected to the Lina order saying this would “disrupt the normal course of doing business in the Philippines.”

His objection is contained in a two-page letter to Lina, pointing out that RA 8506 only bans the use of RHD vehicles on roads and not their importation.

Cruz said their members are not importers of RHD vehicles but mainly perform their role as “common carriers obligated to transport goods from the origin port to the country of destination by virtue of the contract of carriage.”

He added that shippers should not be held liable for the importation of RHD vehicles or parts because they have no direct knowledge of the contents of the container and rely only on the shipper’s declaration.

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BUSY BACKBONE: Imported second-hand vehicles have been the busy backbone of the building and construction industry, as well as small and medium-sized businesses. Their use has been crucial also in relief and rescue operations. They have been the fallback of families looking for inexpensive but reliable vans and utility vehicles.

Importers and vendors of used vehicles point out that no registered indentor, manufacturer, and assembler of brand-new vehicles can claim as much involvement in infrastructure projects and in countryside development.

For every RHD car converted, the importer pays workers a package price ranging from P25,000 to P40,000. Considering the package price and the number of vehicles registered in Subic in 2004 alone, some P1.9-billion was infused to the local economy last year.

The 8,000 workers in the second-hand motor vehicle industry in Subic include contractors, painters, mechanics, tinsmiths, converters from RHD to LHD, air-con mechanics, upholsterers, electricians, suppliers of parts, glass and accessories that are locally sourced.

Add to these peso figures the billions in taxes paid on the used vehicles. Contrast their contribution with the P1 billion-plus in taxes that a prominent distributor of brand-new cars had avoided paying by distorting the configuration of his luxury vehicles to look like tax-free 10-seat utility vans.

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SOLON REACTS: In Congress, Zambales Rep. Milagros Magsaysay denounced the “egotistical attitude” shown by Lina in wielding a heavy hand on importers of used vehicles.

Magsaysay lamented that Lina’s moves “show him as wanting to kill an industry that is truly helping the masses by way of jobs and giving them alternative choice of owning cheaper and more affordable modes of transportation.”

After joint hearings in the House, the Committee on Transportation and Communications and the Committee on Trade and Industry said in their report there is no law barring the entry in the country of used vehicles.

Their report said that the importation of RHD and used vehicles is not costing the government huge losses in revenues. “On the contrary,” it added, “it has been shown that importation has caused the enormous increase of tax collections in Subic, the sprouting of several other big businesses, and the creation of jobs for thousands of Filipinos.”

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NO DELEGATION: On the new Value-Added Tax law that has come under fire, reader “jposadas” emailing from Diliman, said President Arroyo’s raising of the 10-percent VAT rate to 12 percent in January would be an “illegal exercise of legislative powers by the Executive.”

Echoing the views of opposition politicians, Posadas said taxation is a power exclusively vested in Congress. “The power of taxation cannot be delegated to the Executive,” he said, “as what would happen if the President raises the VAT rate to 12 percent.”

As I said last Sunday, although I am not a lawyer, I disagree. Assuming President Arroyo adjusts the rate to 12 percent in January, she would not be legislating or fixing a new tax rate or exercising a delegated legislative power.

Under the Constitution, taxes are to be legislated only by Congress. But the President would not be imposing by herself a new tax in January, or amending the law, or performing a delegated function of legislating a tax rate.

The VAT law is already there, with the 12-percent rate already pre-determined by Congress. The President will just execute or carry out that tax law, as is her solemn duty.

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POWER-SHARING It is not being argued yet, but let me point out again the basic fact that the so-called separation of powers among the three branches of government is not rigid or absolute.

Legislation is by definition a function of the legislature, yet it is not an exclusive domain of Congress. The President has always been part of the lawmaking process. No measure passed by Congress can become a law unless and until the President approves it or allows it to lapse into law.

The President can even veto an act of Congress. But the veto is not denounced as interference in the lawmaking process or usurpation of legislative powers, because precisely the Constitution grants her that power which is in a sense legislative in nature.

Even the supposedly detached Supreme Court sometimes exercises what has come to be known as judicial legislation. This usually involves the high court’s interpreting and amplifying the law to the point of adding new dimensions to it.

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SENADORA REACTS: Yes, Sen. Pia S. Cayetano is busy at work. Reacting to questions on what she has been doing since taking over the Senate seat of her father “Companero” Rene Cayetano, she sent us a list of the bills and resolutions she has filed.

But our mention of her last Sunday was in relation to the public clamor for stopping the collection of unconscionable parking fees in malls and similar shopping areas. Her father pounded on this point as chairman of the committee on justice and human rights.

The Senate inquiry during the tenure of the elder Cayetano produced a committee report that ordered the Solicitor General to file a petition to question the legality of mall parking fees.

Senator Pia told us in an email that in compliance, the Solicitor General has filed two civil cases against mall owners before the Regional Trial Court of Makati. However, the RTC ruled in favor of the mall owners.

The matter was elevated to the Court of Appeals. Docketed as CA GR No. 762-98, the case has been submitted for resolution.

“As such matter is already before the courts,” the senator said, “We deem it proper to await the decision of the courts to determine whether the collection is indeed illegal, as was established by the aforementioned Committee Report, and thus would no longer require the amendment of existing laws.”

(Knowing how many of our courts operate, my fearless forecast is that the super-rich mall owners will win this case.)

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(First published in the Philippine STAR of May 31, 2005)

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