Ever-new regulatory barriers and bureaucratic potholes threaten to curb the freedom of business undertakings. This time regulations and bureaucratic tools have been aimed at collecting all information about the shipment of goods and thereby controlling all flows of goods in the country.
Decree No 164 of the finance ministry, issued on October 24, 1997 and entitled “On bills of lading, the procedure for the accounting, ordering, production, technological protection, distribution, acquisition, use and disposal of”, is a good example of where boundless “improvement” of state control can take, of how officials “enhance” tax administration and how the authorities fight smuggling by manipulating honest entrepreneurs and their money.
The decree of the finance ministry is designed to keep a check on the flows of goods in order to prevent smuggling. The new regulations have extended the scope of control from the national borders and customs offices to the entire territory of the country. There are twelve points specifying requisites obligatory in the new document. These points are, so to speak, an ode to the bureaucratic control mechanism. The form of the new bills of lading reminds one of the shipment lists that were used in the Soviet times for the purpose of controlling national transport routes. In their essence, the new bills keep up the tradition of controlling commercial activities as instituted through the adoption of special accounting documents (VAT invoices and others). The new bills are targeted still further… to control the flow of goods.
Broadening the scope of control will fail to curb the spread of smuggling, for its roots lie deeper and elsewhere than is generally believed. Over-enthusiastic control will only exacerbate the existing problems, as some of them are inherent in the principles of control and their use. Instead of lifting restrictions and humanising tax and tax rates, the authorities have created another control mechanism, a mechanism that will fuel smuggling and augment ill-gotten gains. Nobody knows to how many businesses this will prove to be the last straw that breaks the camel’s back. Nobody knows how many entrepreneurs will swell the ranks of the shadow army.
The adoption of the new accounting system will thwart wholesalers’ plans to modernise the shipment and storage of goods and cut back orders for shipping companies. It will also lengthen, and increase the cost of, the journey of goods from the warehouse to the consumer. The enforcement of the decree in question will undermine competitiveness of Lithuania’s economic agents and worsen the country’s investment climate.
It should be noted that the new regulations run counter to the EU directives on competition, free movement of goods and state regulation, directives that are the benchmarks for the Lithuanian officialdom. I doubt that the authors of these regulations have made any estimation of their costs to society and of the costs that private businesses will sustain by seeking to comply with the new requirements. I doubt that they comprehend the burden of responsibility for good faith errors or non-compliance, and fear of making a mistake and being punished. Finally I doubt that it has ever occurred to bureaucrats that, rather than drudging to accomplish petty jobs coercively forced upon them, entrepreneurs have to centre their entire time and efforts on doing business.
