[UPDATED] Tancoo calls on banks to absorb asset levy

MINISTER of Finance Davendranath Tancoo assured the public that the 0.25 per cent asset levy on total assets on commercial banks and insurance companies effective January 1, would not affect customers.

He also called on the Central Bank to be “vigilant” and ensure that costs are not passed on to the customer.

“Commercial banks' assets hold an asset base of approximately $160 billion while insurance companies hold nearly $70 billion in assets.

“Together, that is over $230 billion in financial assets.

“A levy of only point 0.25 of a per cent, total of one per cent will yield an estimated $5 billion per year in and $75 million per year (respectively).

“I wish to put the Central Bank's governor on notice. The Central Bank will be expected to maintain vigilance and oversight to ensure that this levy absorbed by the institutions and that no undue costs are transferred to the positive borrowers. This is financial responsibility with equity.”

The minister was speaking at the ICATT conference at the Hyatt Regency in Port of Spain.

At the October 13 budget presentation, Tancoo announced plans to impose a 0.25 asset levy on banks and insurance companies effective January 1, 2026.

However concerns were raised by critics who said there were no safeguards in place to ensure the levies would not be passed on to the customer.

The minister, at the TT Manufacturers' Association post-budget forum also acknowledged that while the levy was aimed at institutions, the effect of the levy could result in a trickle-down effect to customers.

“It is very likely,” he said on October 14. “As we’ve seen in other sectors, when taxes are raised, the cost is passed directly to consumers. That’s how businesses operate—and that’s what they will attempt to do,” he said.

However on the next day, October 15, when asked by reporters what customers should do he said: "TT is more digitally aware, and I look forward to the point in time when our citizens start to take their power significantly back.”

"If you find that an institution is not treating you the way that you should be, if you find an institution is overcharging or passing on a quarter per cent of a charge on you, then use your digital tools and find better options."

In a subsequent interview with the media, Tancoo said that the government hopes to focus on the Board of Inland Revenue (BIR) and Customs and Excise to reduce the budget deficit of about $3.865 billion.

“We have established mechanisms already in place by the BIR and Customs and Excise that have been depleted over the last few years because the former government focused on the TTRA. As a result, we have had reduced revenue streams, potential revenue streams, from both of them.

“What we are doing in the last few months, and what we will continue to be doing in the next year or so, is improve the staffing and the resourcing of both the BIR and the Customs and Excise so that those we considered below hanging fruit.

“There's been a substantial amount of tax evasion that we will now be looking to tighten up on,” he added.

During his speech at the Hyatt on November 21, Tancoo said the projected government deficit amounted to 2.17 per cent of TT's GDP – an internationally accepted benchmark for a sustainable budget deficit.

He said the deficit is reflective of the need to maintain essential public services while expanding investment opportunities.

"I am sure that you will agree with me that a modern economy demands a modern tax administration," Tancoo said.

He said rather than outsourcing the responsibility, the government has begun to rebuild and modernise the BIR. He said this will give the accounting fraternity the opportunity to have a representative on the board.

"This approach is not merely a structural change, but a transformational improvement that will strengthen accountability, improve taxpayers service and ensure that revenue collection supports national development."

This story has been updated to include additional details. See original post below.

MINISTER of Finance Davendranath Tancoo assured the public that the 0.25 per cent asset levy on total assets on commercial banks and insurance companies effective January 1, would not affect customers.

He also called on the Central Bank to be “vigilant” and ensure that costs are not passed on to the customer.

“Commercial banks' assets hold an asset base of approximately $160 billion while insurance companies hold nearly $70 billion in assets.

“Together, that is over $230 billion in financial assets.

“A levy of only point 0.25 of a per cent, total of one per cent will yield an estimated $5 billion per year in and $75 million per year (respectively).

“I wish to put the central banks governor on notice. The Central Bank will be expected to maintain vigilance and oversight to ensure that this levy absorbed by the institutions and that no undue costs are transferred to the positive borrowers. This is financial responsibility with equity.”

The minister was speaking at the ICATT conference at the Hyatt Regency in Port of Spain.

At the October 13 budget presentation, Tancoo announced plans to impose a 0.25 asset levy on banks and insurance companies effective January 1, 2026.

However concerns were raised by critics who said there were no safeguards in place to ensure the levies would not be passed on to the customer.

In a subsequent interview with the media, Tancoo said that the government hopes to focus on the Board of Inland Revenue (BIR) and Customs and Excise to reduce the budget deficit of about $3.865 billion.

“We have established mechanisms already in place by the BIR and Customs and Excise that have been depleted over the last few years because the former government focused on the TTRA. As a result, we have had reduced revenue streams, potential revenue streams, from both of them.

“What we are doing in the last few months, and what we will continue to be doing in the next year or so, is improve the staffing and the resourcing of both the BIR and the Customs and Excise so that those we considered below hanging fruit.

“There's been a substantial amount of tax evasion that we will now be looking to tighten up on,” he added.