GST on Public Transport Services in Malaysia

Effective April 1st 2015, Malaysian Government through Royal Malaysian Customs Department, RMCD (Jabatan Kastam Diraja Malaysia, JKDM) will charge Goods and Services Tax (GST) for most products and services offered.

Question: Will there be any GST charge on public transport services?

Answer: No, there will be no GST incurred on public transport services.

Public transport services in Malaysia include KTM Komuter, ETS, KLIA Transit, KLIA Ekspres, taxi and bus services.

Exception: Air transport services

GST will be charged for the following:

  1. Malaysian carrier, domestic flights
  2. Malaysian carrier, international-bound flights from Malaysia

Foreign carriers are not subjected to GST.

The Impact of Government Tranformation Programme (GTP) on Public Transport Sector

Recently I was contacted by a journalist from New Straits Times regarding the impact of Government Transformation Programme (GTP)’s public transport aspects on Malaysians in general. The interview is available below:

Question 1: Are the changes made felt by the people? Based on your own experience, does the changes affect travel time and comfort?

Answer: The changes made can be felt by people, especially everyday commuters and occasional travellers and tourists. I have been on six-car KTM Komuter set as well as the new four-car LRT and I can say the addition of newer trains under the GTP has provided a lot of added convenience for travellers. LRT services are relatively newer compared to KTM Komuter services in Malaysia and the trains seldom experience breakdowns. On the other hands, KTM has undergone a horrible experience with their ageing trains (Class 81, 82 and 83) and has to deal with numerous unexpected service delays, resulting in outstanding amounts of complaints, especially by travellers. Although the decision of buying trains is not made directly by KTM Berhad, we can see how much KTM Berhad tries to rectify the problems that they have.

I had a conversation in 2010 with a KTM personnel about the KTM “Hybrid Trains”, which consists of a set of KTM Komuter EMUs, a generator wagon and a diesel locomotive. Since KTM Berhad did not get new trains, they used every single resource that they have to mitigate the congestion, especially during morning and evening rush hours. The effort put my KTM workforce and management shows that they have been working incessantly to ensure the best service experience possible for the customers.

Now with the addition of ETS trains as well as six-car-sets (SCS), KTM Berhad’s workforce can work more efficiently and focus their effort to improve on other aspects of the service. The improvement on infrastructure has enabled KTM Komuter to stand on par with other service providers, such as RapidKL LRT and KL Monorail.

Question 2: According to the upcoming GTP report, the addition of infrastructure has increased the number of passengers in KTM and LRT by more than double. What is the connection of better public transport system and a ‘great’ city?

Answer: The definition of the word “City” itself implied a densely-populated area. Besides, cities are also being visited regularly by people who do not live there. Therefore, by providing local residents and outsiders a better public transport system, we can ensure the public get around smoother due to more streamlined traffic flow and also. By infrastructure improvement, the overall experience of using public transport is improved, leading more people to utilize it. Public transport is way more effective for the whole city instead of personal transport because it helps to move people around within smaller occupied area (compare cars on roads with trains on tracks).

Great cities around the world such as New York City and Tokyo has excellent public transport system. For example, in New York City, there are 538,000 tourists visiting the city every day. The huge number of tourists require a robust and smooth public transport system. Therefore, a unified transport company called Metropolitan Transportation Authority (MTA) handles New York City Subway, the largest world underground subway network with over 1,000 km of rail network (covered by the Subway system) and 5.2 million daily ridership on weekdays. MTA has been doing a great job in providing smooth travel experience from an extensive subway network with up to the minute punctuality. Although the ageing stations and platform can be an eyesore at times, the overall experience is great for regular commuters and travellers. In conclusion, the efficient public transport system is a vital component in ensuring the success of a ‘great’ city, a city for us to live in and a city for others to visit.

Question 3: What are your recommendation for the government to improve the public transportation system in their next GTP 2?

Answer: The public transportation system improvement plan really needs to be future-proof. Our lack of attention towards future population growth is evident in Puduraya construction, resulting in heavy congestion around the area these days. To mitigate the congestion, additional express bus terminals are being constructed such as Bandar Tasik Selatan Integrated Southern Terminal and Hentian Duta. The Government should consider having better integration across these terminals in the future in order to provide smoother transit between bus terminals for added travellers’ convenience.

Careful planning can be seen in Tun Dr. Mahathir Mohamad’s ambitious plan of having KL International Airport (KLIA) some 60 km away from Kuala Lumpur. Although KLIA is far from the city centre, the robust integration between KLIA and the city can be seen in the construction of highways and establishment of KL Sentral as the central terminal in the city and KLIA Ekspres, a high-speed rail service that links KL Sentral and KLIA. A speedy 28-minute ride between KL Sentral and KLIA makes short-term visits to KL while being in Malaysia for flight transit more appealing. The added number of tourists in Kuala Lumpur also means the added amount of cash inflow.

In New York City, the existing building of Grand Central Terminal in Manhattan still stands today although it was constructed more than 100 years ago. The future-proofing of the planning and designing process take careful consideration of future population and tourist growth. The end result is clear; The Grand Central Terminal remains relevant and provides excellent travelling experience for regular commuters and tourists alike. Besides, they also have a number of other terminals such as the Port Authority Bus Terminal and New York Penn Stations. All of the mentioned stations/terminals have been operating for decades and the structure does not change much despite the rapid growth of the New York City, thanks to the careful and excellent study made by the planners back then. Besides, the integration between them is also ample, providing a smooth transition.