Stop charging unreasonable overdue fines
By Liu Shinan
Email: liushinan@chinadaily.com.cn

A man in Henan Province bought a second-hand crane in July for 80,000 yuan (US$10,000), but was told to pay 700,000 yuan (US$87,500) in overdue fines and other related penalties when he registered the vehicle with the road authorities, because the original owner had not paid the "road maintenance fee" since February 2003.
Penalties for delaying payment are understandable and acceptable for most people, but the astronomically large fine could not but set them wondering why the sum should be so large and whether the authorities had notified the offender in time.
According to the officials dealing with the matter, the fine and penalties were calculated at the rates specified in the State's Stipulations on Collection of Road Management Fees, which rules that each day of default will incur a fine of 1 per cent of the due sum of the road maintenance fee with extra progressive penalties for every three months and six months of delay in payment.
Motor vehicle owners generally would not give a serious thought to the rates, as most of them carefully abide by the rules and even if they fail to pay the fee in time, the delay generally is not too long, hence the fine would not be too frightening. But the Henan case forces us to wonder if the rates are really reasonable.
I assume, theoretically, that the overdue fine and progressive penalties have two purposes: first, punishing those who deliberately delay paying the fee; second, compensating for the loss of interest the fee would otherwise accrue.
The progressive penalties obviously were designed to meet the first purpose, for a delay of three or six months is most likely intentional. Thus, the overdue fine mainly functions as compensation for the interest's loss.
The present bank annual interest rate for current deposits is 0.72 per cent. The overdue charge for default of road maintenance fee, however, is 1 per cent a day, or 365 per cent annually 507 times the bank rate. Isn't this too high? Can the relevant authorities explain the grounds on which the rate was set?
The other question triggered by the Henan case is whether the government department has reminded most offenders of their duty to pay the road maintenance fee on time. The road authorities in Beijing said they regularly send notices to offenders' homes or paste them on their cars. Maybe they do. But I did not receive such a notice in 2004, the year I forgot to pay the road maintenance fee. And none of the people who queued together with me at an office of the Haidian Road Maintenance Fee Collection Centre in early January 2005 to pay the overdue fine had received the notice over 12 months.
Many laws and regulations in China were formulated in the era of planned economy or the early days of market economy. They should be amended in accordance with changing national conditions. When the Stipulations on Collection of Road Management Fees was drafted in 1992, most vehicles were owned by government organizations and enterprises, each of which had at least one employee who was specifically in charge of matters concerning the organization's motor vehicles. This practice prevented the frequent occurrence of defaults, and even if there were considerably large fines, the organizations would not care too much.
Now China has more and more private cars. Many car owners have not developed a habit of paying fees related to their vehicles. Overdue fines will help them cultivate the habit. But they sure need reminding, and a rate 500 times higher than the normal interest rate is too high.
China is now advocating a human-oriented mentality in everything. Why shouldn't our rules and regulations be amended to be more human-friendly and be executed with more human care?

—The Daily Mail-China Daily news exchange item