Finance Minister commits to reducing asset tax if banks lower interest rates

Finance Minister Audley Shaw says the government is prepared to reduce the asset tax for financial institutions if they commit to lowering interest rates.

According to Shaw, interest rates on loans for business are still too high even though there has been some reduction.

He says banks must be innovative when designing loan products for the productive sector and a part of that is bringing interest rates to single digit.

Financial institutions have long complained that the cost of doing business and the tax on assets are hindrances to reducing interest rates to lower levels.

But in responding to the issues raised by the banks, the Finance Minister says the Government will act as long as banks play their part.

Shaw maintains that banks are still too conservative when it comes to offering large portfolios of loans to the private sector.

He says offering more attractive loans to the private sector will also encourage more businesses to join the formal economy.