The Bankers Association of T&T (BATT) has described Finance Minister Colm Imbert’s 35 per cent corporation tax on commercial banks as “contradictory and short-sighted.”
In a statement yesterday, BATT called for a meeting with Imbert as it “noted with some concern the increase from 30 per cent to 35 per cent effective January 1, 2018.”
BATT 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 7,400 T&T citizens, has 20,000 individual shareholders and represents in excess of one million customers across T&T.”
BATT said the tax would dissuade new investment in the sector and could eventually lead to employment loss. The association viewed as disappointing 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.”
Clearly outraged, BATT said it “strongly opposed” the decision and want to meet Imbert to discuss the increase in order 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.”
Also contacted yesterday, Republic Bank Ltd managing director Nigel Baptiste said commercial banks were easy targets for tax increases.
In emailed responses, Baptiste said, “Commercial banks continue to be singled out as relatively soft targets for tax increases due to the meticulous and accurate approach used in the preparation of our audited statements.”
When there is a tax increase, he said it must be looked at relative to how it would affect all parts of the economy and not just the banking sector.
He said the increase in tax could adversely affect bank valuations and by extension, “the value of the investment portfolios of key institutions such as the NIB and numerous other private institutional investors such as the insurance companies.”
Baptiste suggested that a more effective approach to collecting taxes would be to focus on improving the tax collection infrastructure and widening the tax net, especially when it comes to self-employed professionals.