JMMB Group Chief Executive Officer Keith Duncan is reteirating his push for the Government to abolish the asset tax which continues to negatively impact entities in the financial sector.

Duncan raised his concerns at the company’s 12th annual general meeting last Friday at the Jamaica Pegasus hotel. He has been highlighting the issue at multiple AGMs, arguing that the government measure effectively charges companies for assets which might not be performing.

He is also pointing to the tax burden on the financial sector, where most companies pay a 33 1/3 per cent income tax rate due to being regulated, compared to the standard 25 per cent rate.

“So, when we’re paying this asset tax which is a distortionary tax, it is not fair to shareholders, it depletes the capital of the financial institution, and it provides a floor on what we can lend because it is a cost to the business. So, we’re calling on the Government of Jamaica once again to take a look at this,” Duncan stated in his remarks.

Duncan noted that JMMBGL has paid over $9 billion in asset taxes since it was imposed in 2013 and paid $1.16 billion in asset taxes for the group’s first quarter ending June 30. He highlighted that this was twice the $488.89 million paid in dividends by JMMBGL during the 2025 financial year ending March 31.

Several companies pay the asset tax during the first quarter of their financial year which impacts the first quarter earnings for those companies. According to JMMBGL Group Chief Financial Officer Patrick Ellis, if the company was able to amortise the annual asset tax charge, the group’s net profit would be $200 million compared to the $686.40 million net loss reported.

“We continue the advocacy. We believe that it is a policy commitment of the Government. It was showed up in the manifesto of both the opposition and Government of Jamaica that they would remove this distortionary tax over the foreseeable future. It impacts of the cost of intermediating and doing business,” Duncan added.

Trinidadian Finance Minister Davendranath Tancoo announced on Monday that the country would implement an asset levy of 0.25 per cent on commercial banks and insurance companies on January 1.

JMMB Bank (T&T) Limited is the only subsidiary in Trinidad that would be subject to the new asset levy proposed in Trinidad and Tobago. The commercial bank’s standalone asset base is currently TT$3.29 billion (J$77.95 billion) as of March 2025. It reported TT$25.32 million in net profit for the 2025 FY.

Republic Bank Limited and First Citizens Bank Limited are the largest commercial banks in Trinidad with TT$51.57 billion and TT$37.12 billion, respectively. The Trinidadian government via Corporation Sole and the National Investment Fund Holding Company are the largest shareholders.

Guardian General Insurance Limited and Guardian Life of the Caribbean Limited, subsidiaries of Guardian Holdings Limited are the largest general and life insurance companies in Trinidad & Tobago.

Although the Jamaican government doesn’t explicitly state the amount it collects from the asset tax, some companies disclose the asset tax as a separate item on their financial statements. Scotia Group Jamaica Limited’s operating subsidiaries paid a combined $1.69 billion in its current 2025 financial year, a nine per cent increase over the $1.55 billion paid in 2024. Sagicor Group Jamaica Limited’s Jamaican subsidiaries paid $937.39 million in asset taxes during 2024.

The current asset tax has also pushed more financial companies to monetise certain assets to improve their capital adequacy ratios and lower the taxable asset base of assets. This has resulted in some Jamaican commercial banks executing sale and leaseback arrangements where they sell their existing branches or properties and lease them back from the new owner afterwards. The new lease expense lowers the taxable income whereas the asset tax does not lower the taxable income base of a company.

The inclusion of an asset tax creates a cushion and certainty for regional governments where taxes from other sectors might fluctuate from year to year. It also helps to cover gaps in the tax net where the informal sector of a country might not be adequately addressed. Jamaica is currently projecting to report a current account surplus for the current fiscal year compared to T&T which is set to report another deficit in its Government budget.