Managing director of RBC Royal Bank T&T, Darryl White has given his commitment to share in the burden of adjustment, as commercial banks now have to pay to 35 per cent corporation tax from January 1, 2018.
White was shared his views with media following yesterday’s T&T Chamber of Industry and Commerce annual post-budget analysis meeting at the Hyatt Regency, Port-of-Spain.
In delivering the feature address at the meeting, Finance Minister Colm Imbert said the tax imposed had angered banks.
Asked about his position on the tax increase, White said “We understand that there is an adjustment required.”
While Government has to make decisions, White said banks have always been law-abiding, responsible, respectful and pay their taxes.
Asked about his thoughts on the budget, White said the measure implemented by Imbert was expected for some time now.
“People would have been thinking this would have happened a couple of years ago.”
He said what Imbert raised in the budget are realities T&T have been experiencing and grappling with.
Questioned what impact the 35 per cent tax will have on commercial banks since customers are expecting rates and charges to increase, White could not say if banks will absorb the cost or pass it on to its customers.
He said certain details are yet be fleshed out.
“From what I heard there is a freeze going with that with regard to fees and the like. All enterprises have to adjust to the circumstance that we are facing. So if this is the circumstance, well we know that enterprises will look and see how they adjust.”
White said the intentions of the banks have always been to share in the adjustments.
“We understand this is what is required of banks.”
He said while there are always conversations about the profit of banks “it’s interesting that if you look at the bank taxes this time around the Government does not really lose.”
Where the Government owns a bank, White said their revenue “is really not impacted. Because on one hand they collect on taxes and on the other hand they collect dividends. But if you think of the dividends who are not the Government…the dividend holders which is the general public, so what you would expect is that it might have some impact on dividends once profits go down.”
White said if T&T had a perfect capital market, you would see the share price of banks being affected.
Questioned about the reaction of RBC Royal Bank T&T's parent company to the tax news White said: "“I don’t think it would shake RBC so to speak. We are still one of the strongest banks in the world. We will adjust to circumstances. It’s a reality of the competitive space.”