Barbadian Banks Welcome Planned Removal Of Tax On Assets

by Amanda Banks, Tax-News.com, London

30 October 2002

Vice President of the Bankers' Association of Barbados, Mariano Browne said on Monday that the jurisdiction's financial institutions welcome the phased removal of the tax on bank assets announced in Prime Minister Owen Arthur's recent budget.

However, echoing the concerns expressed by opposition political leaders David Thompson and Clyde Mascoll, Mr Browne lamented the fact that the measure will not become effective until 2004.

Separately, the Vice President of the Bankers' Association announced that the banking sector would be adopting a 'wait and see' approach towards the introduction of a deposit insurance scheme, also recently announced by Owen Arthur.

In his Finance Statement, the Prime Minister admitted that the scheme 'will represent an added cost to commercial banks in the short term', and revealed that the Deposit Insurance Fund will be financed by flat rate premiums of between 0.05% and 0.75% levied on all deposit taking institutions.

Speaking to the Barbados Advocate on Monday, Mr Brown observed that for the banks: 'The deposit insurance is therefore likely to be as great, if not worse than the asset tax. I guess that will be the initial reaction.'

However, he declined to comment on whether this additional cost would be passed on to customers of Barbadian banks.

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