A new survey from TD Bank suggests corporate treasurers have mixed outlooks on the impact of U.S. tax reform on their organizations.
Forty-two percent of professionals surveyed said they believe tax reform will lead to significant economic benefits for their organizations, TD Bank said. The financial institution (FI) released its latest survey, “The 2017–2018 Treasury Perspectives Survey,” conducted with Strategic Treasurer, on Thursday (March 22).
More than a quarter (28 percent) of treasurers with cash abroad said they will repatriate income back into the U.S. as a result of tax reform.
Researchers found that bank professionals are more optimistic on tax reform, with 58 percent saying they believe the legislation will positively impact their business, while more than a third (37 percent) said they believe tax reform will benefit their companies’ financial performance.
Survey respondents said they have several focuses in mind when it comes to investing freed-up capital as a result of tax reform, with 43 percent planning to use it for capital expenditure, including IT, plant and equipment upgrades. A third plan to use it for debt repayment, and 28 percent said they want to use the cash for future investments.
“The Tax Cuts and Jobs Act implementation could cause businesses to have extra capital to deploy, but it is even more encouraging that organizations expect to have cash on hand through the normal course of business in the coming year,” said TD Bank Manager of Treasury Management Sales Tom Gregory in a statement. “Together, these factors mean that companies could invest more funds, hire employees and generally spend on both their businesses and communities.”
Despite the optimism, TD Bank found that the top concern for corporate treasurers and financial institutions is cybersecurity, followed by the cost of compliance, regulatory gridlock and healthcare reform.
Still, two-thirds of treasurers said they expect the GDP of their headquarter countries to expand in the coming year, while 73 percent said they expect their companies’ sales and revenues to increase too. Seventy-seven percent of FIs surveyed said they expect GDP to increase, and 92 percent said they expect their institution’s revenue to grow in the coming year.