It's time for the government to start using taxes and tax breaks to improve public transit.

It's tax time here in Malaysia, and at tax time, people start displaying their frustrations. And yet, tax time is also a good time to take a look back at the decisions of the previous year and make effective decisions about the future.

In terms of their long lasting effects, 'Tax Year Resolutions' will probably have more of an impact than New Year's Resolutions, and last a lot longer.

It is also quite ironic that here in Malaysia the due date for tax returns is April 30 and the date to celebrate workers (Labour Day or Worker's Day) comes right after.

I like to look at May 1 as an opportunity for a Tax Year Resolution. We, the people, can make decisions about using money to make our lives better. More importantly, Malaysians should start using May 1 as a day to ask the government to provide more ways to make their lives better.

This May 1, 2007, I would like to encourage Malaysians to invite their government to consider a few interesting, positive and exciting ways to encourage people to use public transit.

Public transport or public transit?

Let me step aside for one moment. I am not using the term "public transport" here. To me, "public transport" is a term that is very broad (perhaps too broad). The definition of "public transport" can include taxis, school and factory buses, along with the omnibuses, stage buses, monorail and LRT.

Therefore, to my mind public transport is not the same thing as public transit. So, I worry when the government talks about increasing "public transport" use to 40% of the population. What type of public transport are they referring to? How do they plan to define the 40%? These and other similar questions remain unanswered even today.

Let us go back to the theme of this article. The government has made it clear that they want the people of Malaysia, especially in congested urban centres, to make use of public transport.

Unfortunately, public transport, especially public bus transit, suffers from a very poor reputation brought about by years of poor organisation, poor investment and general neglect.

As a result, the people who would benefit most from using public transit, such as executives and professionals, are the least interested in using the service.

The government and (Klang Valley public transport operator) RapidKL are trying, but there isn't very much to motivate these professional to use public transit. Buses are still delayed, trains are still packed, and they still have to walk in the heat and rain or get into the car to drive to the bus hub or LRT station.

Sadly, once this potential passenger gets into their car, it takes a lot to get them out of it.

A small, positive solution

Reduced fuel subsidies (leading to higher petrol prices), congestion charges to enter the city centre, increased parking charges, and reduced numbers of parking spaces are going to get some people to switch from cars to public transit. However, for these people, this will not be a positive choice. They will not be using transit because they want to, but rather, because they are forced to.

For many of these people, they will simply bear the increased costs. Their cost of living will increase, and so will the burden on the rakyat of Malaysia.

The government should find ways to encourage Malaysians to give up their cars. I think that one positive way to do this would be to make the purchase of monthly transit passes tax deductible. The government should allow Malaysian taxpayers who purchase a monthly pass to collect a tax break at the end of the tax year. They can start this for the 2007 tax year.

Consider this: the cost of a monthly train and bus pass for RapidKL is RM125. A year's worth of passes would cost the user RM1,500.

Now, the annual cost of owning and operating a car annually is far more than RM1500. With a car you are paying for the costs of purchasing (including loan fees and interest), depreciation (the loss of resale value of the car), maintenance (occasional and emergency), petrol, road tax, licensing fees, and of course, the ever-present toll charges.

Despite these high costs, many Malaysians will choose the car, and balk at paying RM125 per month for their transit pass.

That is why the tax credit should be introduced. After paying RM125 per month for your pass, and knowing that they can collect a tax credit at the end of the tax year, the purchaser would be encouraged to use their pass and take public transit more often.

How much credit?

The costs of monthly transit passes vary, so the actual amount of the credit would have to be determined. Using the RapidKL monthly bus and LRT pass costing RM125, a credit of RM25 would be ideal. This would bring the actual cost of the monthly pass down to RM100, with an annual cost of RM1,200 rather than RM1,500. This would definitely encourage more people, especially professionals and executives, to purchase monthly passes.

Private companies can also get involved in this tax credit initiative. Why not, the more the merrier. Companies that purchase monthly passes for their employees can already claim these cost as business expenses. To encourage more companies to get involved, why not offer more tax breaks? The companies could purchase monthly passes for an entire year for employees who are interested. By paying the costs in advance, the companies could be given a discount from RapidKL.

In addition to the claim for business expenses, the government could allow the company to claim additional tax credits, for their socially responsible contribution towards a better environment. After all, more employees using public transit means fewer vehicles on the road, which means reduced traffic congestion and reduced air pollution.

Using public transit does not have to be a negative experience. No one should feel like they are forced to use public transit because they cannot afford a car. At the same time, no one should feel like they are forced to pay the high costs of owning and operating a car because there are no other options.

By giving these tax credits, and investing in improving public transit services, the government will make public transit a more realistic choice for more and more Malaysians.

MOAZ YUSUF AHMAD is a regular user of public transport who is deeply concerned that government plans to encourage people to use public transport will ultimately fail because of poor planning and a lack of support from the public.