Trinidad & Tobago has announced plans to introduce an asset tax for its commercial banks and insurance companies to support its latest fiscal budget.

Trinidadian Finance Minister Davendranath Tancoo made the announcement during his 2026 budget presentation on Monday. The levy, which is set to take effect on January 1, will be 0.25 per cent of the assets of commercial banks and insurance companies operating in the twin-island republic. This levy will not be applied on financial institutions and insurance companies that operate under the provisions of the Special Economic Zones Act. This measure is expected to bring in TT$575 million (J$13.51 billion) of revenue for the Government.

“Commercial banks and insurance companies, due to their large size, profitability and capitalisation, have reported sustained earnings, high liquidity ratios and strong asset base growth. Conservative lending practices and favourable monetary conditions have driven these outcomes,” Tancoo said in his presentation.

He also added, “Despite this, the average citizen continues to be subjected to unreasonably high fees and near-zero returns on their savings and investments.”

Barbados and Jamaica are two other countries in the English-speaking Caribbean that have an asset tax on their domestic financial sector. These taxes help support the budget of both countries which rely on tourism and services.

However, Ernst & Young Services Limited has highlighted concerns surrounding the proposed levy in T&T. Some of the concerns surround the class of assets subject to the levy, whether foreign or domestic assets, and the way the asset base is to be calculated. Barbados defines domestic assets as assets of a bank held in the national currency. Also, the potential impact on cost of credit and services from banks and insurance companies is yet to be seen.

“In introducing an asset levy on banks and insurance companies, T&T has joined a growing regional consensus on fiscal reform. This move mirrors similar levies implemented in Jamaica and Barbados, where financial institutions are required to contribute a modest percentage of their asset base to public revenue. Such measures reflect a pragmatic shift, recognising that those with the greatest capacity to contribute should play a more active role in supporting national development,” Ernst & Young Services Limited said in its executive summary of the Trinidadian budget.

Jamaica introduced a modified asset tax regime in 2012 which applied to financial and non-financial institutions. Financial institutions paid an asset tax as a percentage of their taxable assets with adjustments for certain items (eg prudential loan loss provisions) while non-financial institutions paid a flat figure between $5,000-$100,000. The asset tax was increased from 0.14 per cent to 0.25 per cent in May 2014 for companies regulated by the Bank of Jamaica and Financial Services Commission. This asset tax is not deductible under the Income Tax Act.

The asset tax for non-financial institutions and minimum business tax was abolished in 2019 by then Finance Minister Dr Nigel Clarke as the Government sought to increase formalisation of businesses in the economy. Although the government planned to cut the asset tax rate in half in 2020, this was not enacted due to the COVID-19 pandemic. The financial sector agreed that the government needed certainty in revenue and decided to continue paying at the 0.25 per cent rate. The proposed 50 per cent reduction was set to cost the Government $3.02 billion in revenue.

Barbados introduced its own asset tax in January 2017 for some of its domestic financial institutions. An insurance company, credit union or deposit taking licensee were charged 0.35 per cent on the average domestic assets per annum. This amount was pro-rated and paid every three months. There was also another legislation which charged 0.35 per cent per cent on the average domestic assets per annum for a bank. The Barbados Revenue Authority indicated that the tax on bank asset was BDS$24.07 million (J$1.54 billion) while the tax on asset was BDS$14.55 million (J$929.56 million) in 2017.