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Location: Makati City, Metro Manila, Philippines

Sunday, May 14, 2006

Unnecessary requirements = more govt revenues

One indicator that a government is big enough is when it has the gall of imposing one requirement after another, and even come to a point of suspecting adult citizens as guilty of some crimes, then requiring them to have the burden of proof -- after paying various taxes and fees -- of showing that indeed they are not guilty of this and that crime. Below are some examples of how the big Philippine government practices this.

One, government thinks every driver’s license applicant is a potential illegal drug user. Thus, each applicant has the burden of proof of showing the Land Transportation Office (LTO) that he/she is not a user, by paying P300 “drug test fee”, go through a private clinic that is LTO- certified, submit urine sample, get the results, then pay the license and related fees, before a driver's license (new or renewal for the expired one) is issued. This cycle is done every 3 years.

Two, government thinks every vehicle, including newly-bought ones, is a potential smoke-belcher. Thus, vehicle owners have the burden of proof of showing the LTO that his/her vehicle is not a smoke-belcher, by paying "smoke emission test fee" (P500 for cars, P150 for motorcycles, higher fees for trucks and buses), undergo the test. Then pay the motor vehicle registration tax and related fees, before the vehicle is given new registration papers. This cycle is done annually.

Three, government thinks every public utility jeepney (PUJ) and bus (PUB) is a potential "over-charger" of passengers. Thus, jeepney and bus drivers and operators have to get that one piece of paper from the Land Transportation Franchising and Regulatory Board (LTFRB) that shows the new one-page fare matrix, at a hefty price of P560. Even for short-distance route of below 4 kms., the jeepney driver or operator must still get that LTFRB certificate that the route is below 4 kms., and hence, the fare should not be more than P7.50 per passenger (or any other future amount as minimum fare). If the jeepney driver or bus conductor does not have that bureau’s fare matrix, he is not allowed to charge the higher fare, even if petroleum prices and taxes have increased. Otherwise, the police will apprehend and fine him.

Four, government thinks many new job applicants for government service as well as new passport applicants have some criminal records. Thus, each applicant has the burden of proof of showing that he/she has no past criminal record (or just a light one) by going to the National Bureau of Investigation (NBI), pay the “NBI clearance fee”, before a clearance is issued. There are other cases involving other government agencies.

Now, an illegal drug user will not take drugs today if he is planning to apply for a driver's license tomorrow or the next few days. So the "drug test" will show "negative", naturally. So, how can government catch the drug users among the driver’s license applicants from this test? And if your vehicle is a smoke-belcher, and you have to re-register the vehicle this week, you will clean the muffler or change the engine oil, or put some chemicals so the smoke exhaust will not be black. So how can government catch the real smoke belchers from this test?

And makes me wonder, why would a piece of yellow-colored LTFRB paper cost P560? A jeepney driver that I talked to said he gave P600 but the bureaucrats did not even return his P40 change. If the P560 for a piece of paper is a form of tax for public jeepneys, then that’s the third tax levied on public utilities: (a) annual vehicle registration tax, (b) franchise tax, and (c) fare matrix tax. And there are tens of thousands of jeepneys in Metro Manila alone.

It is clear that those additional requirements do not serve their purported purposes, and hence, must be abolished. Additional requirements mean additional expenses, additional hassle in time and effort for the taxpayers. Those certified private clinics for the “drug test” and private emission test centers for the “emission test” get instant monopoly positions because certifications from other clinics are either not honored or will take a longer time for verification. And monopolies, almost always, are government-created and legislated, and the top bureaucrats or politicians get political “rents” from the accredited private monopolists.

Big governments, instead of considering their people as potential criminals, should look inwards and assess the distortionary effects of their over-regulation, big bureaucracy, and multiple taxes and fees, interventions that make the lives of the citizens they claim to serve more complicated.

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