Banks’ performance and taxes paid by banks

Thursday, 14 March 2013 01:14 -     - {{hitsCtrl.values.hits}}

Most of the banks have made good profits and delivered high dividends to the shareholders. This is a good sign for the economy that the country’s economic engine is revving.

Competition among the banks has made some banks come out with press releases post corporate tax and some after corporate tax, maybe to confuse the public with their performance.

A quick look at the taxes paid by banks needs a closer study by tax authorities. Most banks in Sri Lanka including the State banks have paid around 28%-31% of the final profit to the State. Take the Hatton National Bank, a large private bank – it has only paid around 20%-22% of its profit.

A 7% to 8% difference or tax savings makes a big difference to our country’s cash strapped coffers. The breweries and tobacco companies give most of their profits to the State by way of taxes, much more than what the banks pay.

A business newspaper like the Financial Times should study this and educate retail investors like us on how different companies are able to pay varying taxes.

D. Fernando

Professional Accountant