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Modernizing financial system and penalizing tax fraud still to be approved in Panama

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  • Sat, 06/30/2018 - 17:12
Economia panama
  • EFE

Modernizing the International Financial System of Panama, penalizing tax fraud and amending the Fiscal Social Responsibility Law, are the assignments that remain pending in the economic agenda, said the Minister of Economy and Finance, Dulcidio De La Guardia.

The Minister of Economy did not cease to be part of the Executive since June 30 and said through a management report from 2014 to 2017, it is necessary to read these bills in the National Assembly (AN-Parliament), to avoid consequences that affect the performance and economic competition of the nation.

"We still have a pending reading and the approval of Law 591 of Fiscal Fraud, this is the main risk that the Panamanian economy is facing at the moment. We are failing to comply with international standards stating that tax fraud is a crime," said De La Guardia .

This bill will allow the financial center, as well as the logistical and legal services activities, to shield against the possible use of tax evasion and money laundering.

He urged to read as soon as possible the Law for the Modernization of the International Financial System, which will provide the country with competitiveness as a financial services platform; and the Tax Social Responsibility Law and the Savings Law of Panama, to reduce the tax deficit equivalent to 1.5 percent of gross domestic product (GDP).

According to the Ministry of Economy and Finance (MEF), in the administration of Panamanian President Juan Carlos Varela, 24 bills, 27 decrees and 11 intergovernmental agreements have been approved.

Among the initiatives, Panama was removed from the gray list of the Financial Action Task Force (FATF) and the Gray List of the Global Forum on Tax Transparency of the Organization for Economic Cooperation and Development (OECD).

During the reading, De La Guardia also said the main achievements of the Ministry of Economy and Finance of the last four years included the fact that Panama stood out as the nation with the highest economic development in Latin America, with an average increase of 5.2 percent in that period.

He stressed that the MEF estimates that by 2018 the economy will grow 4.5 percent less than the 5.5 percent initially estimated, this mainly due to the effects of a strike held in the construction sector in mid-April.

Dulcidio De La Guardia said there was a reduction in poverty levels of the population, between the period 2014-2017, by 25.6 percent to 20 percent, that is, 150,818 Panamanians emerged from poverty.

"This poverty reduction was due to economic growth, controlled inflation levels, and controlled government transfers," the outgoing minister said.

He said growth was achieved without inflation, given that in 2013 it rose by 4 percent, in 2014 to 2.6 percent, and last year was reduced to 0.9 percent.

"Inflation is a tax paid mainly by the most vulnerable and the ability to cope with their needs decreases, so it is important to stop the inflationary levels of Panama," the senior official said.

He said records of Foreign Direct Investment (FDI) were obtained, reaching 5,300 million dollars in 2017, that is, 8.6 percent of GDP.

According to the official, the main public and private investment projects that are being implemented are Line 2 of the Metro, the Urban Renovation of Colón and the expansion of the new Tocumen International Airport terminal, the country's main airport.

Dulcidio De La Guardia leaves office as Minister of Economy and Finance to resume his activities in the private sector; however, he will continue to support President Juan Carlos Varela’s administration from other spheres.

Source-EFE

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