Panama is preparing to enter a new political cycle with important challenges in the fiscal and productive areas, following a government led by Juan Carlos Varela that fell short on key issues such as the economic momentum.
Among the economic challenges of the new government is improving the efficiency of the tax system. After more than five years of an economic slowdown, awarded by different experts to a historical cycle, the relaunching of the economy of Panama poses to the new Government the challenge of propping up fiscal policy to improve, among other things, the collection.
Panama closed 2018 with gross domestic product (GDP) growth of 3.7%, the lowest rate since 2009 (2.4%), which placed the indicator in nominal terms at 65,055.1 million dollars and the fiscal deficit in the 2%.
"We have to raise the collection," affirmed Efe the dean of the Faculty of Economics of the State University of Panama, Rolando Gordón, who recommended the new Executive to opt for a frontal fight against tax evasion, which "currently exceeds 35% ", before thinking about applying new taxes.
The coordinator of Macroeconomic Analysis of the Central American Institute of Fiscal Studies (Icefi), Abelardo Medina, said that it is "essential to improve the efficiency of the tax system" of Panama, a country that has seen its income shrink in this way in recent years. which has produced "an increase in the fiscal deficit and therefore of the debt in nominal terms". Another challenge that the new government will face is to refinance the public debt.
For the former president of the National College of Economists Adolfo Quintero, the new Panamanian Administration will have to refinance a debt that approaches dangerous limits, around 40% of GDP. The debt of Panama's non-financial public sector stood at 25,893 million dollars at the end of March.