No major impact on banks, interest rates over 2% NBT

Monday, 25 November 2013 00:34 - - {{hitsCtrl.values.hits}}

Treasury Secretary Dr. P.B. Jayasundera on Friday said that extending the 2% Nation Building Tax (NBT) on banks will not have a major impact on them, nor will it have a bearing on interest rates. The Budget 2014 proposed a 2% NBT on all banks and financial institutions in a move to raise Rs. 3.6 billion in revenue. “The banks can absorb and there is no issue. Banks benefitted most when we reduced the VAT from 20% to 12% and tax on profits from 37% to 28% in 2012 Budget. I also don’t see any reason for 2% NBT to put upward pressure on interest rates. In fact sound macroeconomic fundamentals envisaged in Budget 2014 point to a lower interest rate scenario,” Dr. Jayasundera emphasised.

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