Malaysiakini Letter

Budget 2019 - gov't should introduce Transit Development Tax

RP1  |  Published:  |  Modified:

LETTER | I refer to news reports that the government may consider new taxes. I would like to suggest the government to introduce a transit/ transportation development tax (TDT). The purpose of this tax is to fund public transport projects or even subsidise public transport fares, particularly in the Klang Valley.

It's not fair when the government allocate billions of taxpayers money to only develop Klang Valley public transport network but leave other states behind. This isn't right as all Malaysians including those who reside in Perlis, Melaka or Kuantan pay taxes too but they don't get to use the LRT, MRT or BRT.

It is indeed worrying that the government has shelved projects like the MRT circle line, the HSR and is downsizing the MRT2 and LRT3. The population of Greater KL is growing and we need more networks of public transportation. I suggest the government impose a 5% TDT on several services in the Klang Valley which focus on private transportation.

Here's how the government should implement the TDT in the Klang Valley.

1. Impose a 5% TDT on all parking charges including in shopping malls and local council parking bays. I also suggest the government abolish the 10% Touch & Go surcharge on parking fares especially in malls. We need to make driving and parking expensive in order to have cheaper and better public transportation system.

2. Impose a 5% TDT on Ron95 and 10% TDT on Ron97 petrol prices in all petrol stations in the Klang Valley. It doesn't make sense when the government is spending millions of taxpayers money to subsidise petrol but is downsizing public transport projects.

3. Introduce TDT instead of congestion charges. Congestion charges are not something new. Singapore has implemented this years ago and Jakarta is set to introduce congestion charges by next year to curb congestion. The city of London introduced congestion charges and money collected from it are being channelled back to fund public transport development in London. We can do something similar with TDT. Make drivers that intend to drive to downtown KL pay TDT.

4. Ensure all new developments in the Klang Valley pay TDT. Similar to Washington, all new properties in the Klang Valley should pay TDT in order to improve connectivity to a public transport system such as by building walkways, ramps, pedestrian bridges or bus stops. So instead of using funds from local councils or public transport operators, the TDT will come in to assist with funding for all these.

I seriously hope the government will consider the suggestion to introduce the TDT. Starting at a rate of 5% and focusing on the Klang Valley first will ensure comfortable and steady implementation. Then the government can consider implementing it at other growing cities such as Penang and Johor at a later stage.

We must make driving around in the Klang Valley more expensive. Imagine if the amount of TDT collected over the period of four years from petrol and parking. There will be eventually funds from TDT that can be used to build more MRT and LRT lines. Plus more free bus services can be introduced in the Klang Valley.

In addition, the TDT will also help to subsidise public transport fares. I understand that it will cost the government about RM300 million annually to introduce a RM100 monthly pass for RapidKL but using this RM300 million from taxpayers in Kuantan and Sabah won't be fair as they don't benefit from it.

The TDT also serves as a niche tax system where people in a particular area pay extra to use services that are available exclusively for them. In this case, Klang Valley residents that pay TDT will benefit from this.

Malaysians are fortunate enough to pay low personal tax rates and a rather low Sales And Services Tax which is good. But we need to introduce specific target taxes to fund developments like public transport which is a symbol of a nation's progress.


The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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