BATT calls increased tax on commercial banks "short-sighted"
The Bankers Association of Trinidad and Tobago (BATT) has noted with some concern the recently announced increase in the corporate tax rate, to be applied to the commercial banks in Trinidad and Tobago, from 30 percent to 35 percent.
This announcement was made during the 2017/2018 Budget presentation entitled “Changing the Paradigm” by Finance Minister Colm Imbert in the Lower House earlier on Monday.
The Finance Minister in making the announcement said consistent with the need to spread the burden of adjustment across all sectors, this new tax bracket on chargeable profits for commercial banks will take effect from January 2018.
BATT in a statement released on Monday afternoon said the increase in corporate tax rate for banks is contradictory and short-sighted.
The Association said the fact that the commercial banking sector was singled out for this unique corporate tax rate is concerning and disproportionately affects an industry, which employs over 7400 Trinidad and Tobago citizens, has 20,000 individual shareholders and represents in excess of one million customers across the country.
BATT said what is also contradictory in this announcement is that the Minister of Finance also made the case for Trinidad and Tobago becoming a financial hub for the Caribbean region and suggested that this could increase employment in the country.
The Association said what this increase in corporate tax rate does, however, is to create the opposite effect and dissuades new investment in the sector and could eventually lead to employment loss.
BATT said while it acknowledges the challenges facing the country from falling revenues, it is disappointing that the Minister of Finance 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 proportion of the economy which pays little or no taxes.
The Association said it strongly opposes this decision and will be seeking to discuss the matter further with the Minister of Finance 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 interests of the Country and the Financial Sector.