MINISTER OF FINANCE and Economic Affairs Chris Sinckler has announced Government’s intention to increase the Bank Asset Tax from 0.2 per cent to 0.35 per cent.
Delivering the 2016 Financial Statement and Budgetary Proposals today, he said the tax becomes effective immediately with the assessment for the assets starting from April 1 2016.
“In March 2015, the Central Bank of Barbados took the bold step of liberalizing the minimum savings rates (MSR) at commercial banking institutions in Barbados. It was hoped that by freeing banks of this requirement, that as banking institutions received the benefit of a lesser cost burden at this end, it would have fed through for a faster and deeper benefit for consumers of banking services in many other critical portfolios,” Sinckler told the House.
However, he said he was “particularly unimpressed” with the efforst made by banks in this regard.
“ As such, and as a little reminder to them of the need to share their new found and much appreciated benefits from the liberalisation of the MSR, I have decided to use a little more concrete persuasion to nudge them along in the desired direction,” he said in announcing the tax increase.
Sinckler said it is estimated that the 0.15 percentage point increase in the rate will yield additional revenue of $14.3 million. The expected intake from the tax for a full financial year is estimated to be $33.3 million using the 2015 asset base of the banking system. (NB)
