POSTSCRIPT / October 13, 2005 / Thursday


Philippine STAR Columnist

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GMA biased against poor buyers of second-hand cars

BIAS SHOWING: The Arroyo administration’s bias against the poor is showing with its selective harassment of owners of used motor vehicles that had been converted to left-hand drive (LHD) before registration.

Many buyers in good faith of such used vehicles are complaining that the Land Transportation Office has been subjecting them to harassment not inflicted on other car-owners presenting their vehicles for renewal of registration.

These used vehicles, imported as right-hand-drive (RHD) and converted to LHD before taken out of the free trade zone, had been checked for smoke emission, roadworthiness, etc., and the proper taxes paid on them BEFORE they were originally registered by the LTO.

Having inspected and registered them after finding all the requirements to have been complied with, the LTO has no more business singling them out now for unusual harassment.

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NO VIOLATION: Their objective must be to discourage buyers of cheap converted cars that have been competing with the exorbitantly priced brand-new models imported or assembled by “automotive manufacturers.”

Everybody must be reminded that the law prohibits the DRIVING of right-hand drive vehicles on Philippine roads, not their IMPORTATION.

So before the imported RHD cars are taken out of the free trade zone, such as Subic, they are converted to LHD with the use of industry-accepted conversion kits and thereby made safe and legal for use on public roads. Where is the violation?

Before the used cars are brought out of the free trade zone, they are tested to satisfy the government’s stringent requirements. Taxes due are paid before they are registered by the LTO and sold to the public.

Having checked compliance and registered them in a regular procedure, the LTO cannot now arbitrarily stop them on the road. The LTO must stop harassing buyers in good faith and making life miserable for them when they present their vehicles for re-registration.

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HOW MUCH?: It is obvious that some LTO officials are working to advance the business of the importers and assemblers of brand-new vehicles whose units they do not subject to the same scrutiny.

But why should government personnel go out of their way to do that? Are they being paid to harass buyers in good faith of tax-paid converted second-hand vehicles?

People should not be punished for being able to afford only second-hand cars. It is not their fault that, because they are not wealthy, they cannot buy the overpriced models being peddled by the “automotive manufacturers.”

We place their name in quotation marks, because despite the many decades that they had been given a chance to show they are deserving of government incentives, these big businessmen in the automotive business have failed to manufacturer even one unit.

They just import the vehicles already assembled or bring in the knocked-down parts and assemble the units locally to escape paying the correct duties and taxes for completely built units.

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SUDDEN, SELECTIVE: There are charges every now and then that these converted vehicles had been smuggled — meaning no duties had been paid on them.

If this were the case, by all means the vehicles must be seized. But government agents should not do that after they had accepted the correct tax payment, issued receipts and certifications, and registered the vehicles.

They should not pretend to enforce the law by spot-checking and running after the vehicles in the streets.

When one buys one these converted vehicles, he gets full official documentation as to taxes paid, smoke emission compliance, etc., and LTO registration. Where is the violation?

If indeed there were/are violations, then the vehicles should not have been registered by the LTO in the first place.

Who is paying LTO officials for their sudden interest in enforcing the rules selectively and their harassing the buyers in good faith of converted vehicles

If the government wants to collect taxes, it should press the tax case, for instance, of a giant distributor who reportedly cheated the government of more than P1 billion by putting small seats in the luggage section of its van to make it appear to be a 10-seater and therefore exempted from excise tax.

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RHD IMPACT: The harassment of buyers in good faith of second-hand converted vehicles has been on-and-off.

Last May, we already noted this in POSTCRIPT. We said then that 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 in disasters and calamities. 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 just one prominent distributor of brand-new cars had avoided paying by distorting the configuration of his luxury model.

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SMUGGLING REPORT: Sen. Richard Gordon, meanwhile, said that officials of the Poro Point Development Corp. had told him that a ship with 400 used RHD vehicles from Korea unloaded without import permits 56 of the vehicles in Poro Point, La Union, with the rest bound for the Subic Bay Freeport Zone.

By all means, if the report is true, the government should seize the vehicles and punish the culprits. It is only when the government shows it means business that taxpayers behave.

“Imagine the audacity of these smugglers who seem to not have any fear of the law, that they find every means possible and move from port to port, if necessary, to engage in these illegal activities that are obviously very profitable for them but detrimental to our country,” Gordon said.

He noted that while the government asks the people to pay more taxes, such as the controversial Value-Added Tax, “a powerful few are growing rich by breaking the law, and laughing all the way to the bank!”

The senator said that Juanito Antonio and Tony Manguiat, president and vice president, respectively, of the PPDC, refused to issue entry permits for the vehicles because the shipment did not have import documentation.

Despite this, the importers managed to obtain a court order to release the cars. See how even the courts get into the act? Is it the hard times or sheer force of habit?

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TPL RACKET: Also on motor vehicles, former Insurance Commission chief Benjamin Santos is asking senators to investigate a vehicle insurance scam that he said has deprived the government of at least P410 million in annual revenue.

Santos said he is willing to testify on the irregularities in the non-life insurance sector, which allegedly involved at least four majority congressmen connected to vehicle insurance companies.

These congressmen reportedly asked him to spare vehicle insurance companies who had insufficient capital to fund their Compulsory Third Party Liability (CTPL) policies for private vehicle owners.

Santos insinuated that some of the congressmen whom he failed to please had worked for his removal from his IC post. He was served his walking papers last Wednesday.

Insurance companies dealing with CTPL policies earn over P2.6 billion annually, P500 million of which should go to the government. But fake insurance policies are being sold for as low as P600. Owners of the fake policies are never paid their claims when they meet with accidents.

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(First published in the Philippine STAR of October 13, 2005)

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