Not mincing its words, the Bankers Association (BATT) says Government’s decision to raise banks’ corporate tax rate from 30 to 35 percent is, “contradictory and short-sighted.”
“The fact that the commercial banking sector was singled out for this unique corporate tax rate is concerning,” BATT declared. Saying it “strongly opposes this decision”, BATT yesterday evening announced its intention to, “discuss the matter further” with Finance Minister Colm Imbert.
This, it said, would be done to ensure the employees, shareholders and customers who depend on the strength and stability of this sector, are not affected by decisions which are short-sighted and not in the best long-term interest of the country and its financial sector.
The five percent increase which banks must pay was announced yesterday by Finance Minister, Colm Imbert, during his presentation of the 2017 - 2018 Budget in Parliament. Imbert said, “This new tax bracket on chargeable profits for commercial banks will take effect from January 1, 2018.”
BATT said the five percent increase in banks’ corporate tax rate would, “disproportionately affect an industry which employs over 7,400 citizens, has 20,000 individual shareholders and represents in excess of one million customers across the country.”
Continuing its criticism of the move, BATT argued that doing so is contradictory to Imbert having made the case for TT to become the financial hub of the Caribbean, something which the association noted the minister had suggested could increase employment in the country.
“What this increase in corporate tax rate does however is create the opposite effect and dissuades new investment in the (banking) sector and could eventually lead to employment loss.”
BATT acknowledged the challenges facing TT from falling revenues but expressed disappointment that Imbert chose to focus on industries which are already contributing to the burden sharing, instead of focusing more fully on widening the tax net to the large proportions of the economy which pay little or no taxes.