Tax fraud will have more severe punishments in Panama from now on

Fraude fiscal
  • EFE

The National Assembly (NA) of Panama approved on Monday in the second debate a bill that raises tax evasion to criminal offense, with penalties of 2 to 5 years in prison to the taxpayer who evades more than $ 300,000 in taxes.

With this approval of the bill 591 that penalizes the fiscal evaluation, the plenary session of the NA concluded the permanent session declared on January 22 to discuss the initiative, suspended that same day and retaken to give it a vote and send it to the third final debate.

The project that should have been approved in extraordinary sessions last December, penalizes tax evasion by adding chapter XII, called Crimes against the National Treasury, to Title VII of the Penal Code.

The initiative was presented to the Parliament by the Executive to adapt the Panamanian legislation in the matter of tax payments, defining issues of evasion and tax fraud in order to comply with the requirements of the Financial Action Group (FATF) and prevent the country from entering the so-called gray lists of nations that do not cooperate in the fight against money laundering.

These regulations were modified on the one hand to meet the demands of the FATF, but also in defending the interests of the country, indicated a public pronouncement of the NA.

The deputy Zulay Rodríguez, of the opposition party Partido Revolucionario Democrático (PRD), affirmed that with this project "we are once again selling our sovereignty, we have broken the country again".

The legislative information highlighted that the Panamanian Minister of Economy and Finance (MEF), Eyda Varela de Chinchilla, said in the debate that there are interests of business sectors, and that is why they oppose the legislation.

The head of the MEF also explained that only 80 taxpayers surpass the figures of 300,000 dollars in the payment of taxes, therefore, it does not affect the majority of Panamanians. At the same time, she dismissed it as a rule that can be used by this Administration to persecute political opponents, since, she said, there is little time to hand over power.

The jail penalty of tax evasion is a proposal that generates some controversy in Panama and is a measure demanded by multilateral organizations such as the International Monetary Fund or the Organization for Economic Cooperation and Development (OECD).

Currently, only Panama and the Bahamas avoid penalizing tax frauds taking into account the countries of the region. In the case of the canal country, the penalties for this crime include fines of between 2 to 5 times the amount defrauded to the treasury, so they seek to take more forceful actions in relation to this activity.

The president of the Bar Association (CNA), Dionisio Rodríguez, affirmed that this norm "of course that is going to be used for political persecutions", at the time that demanded a deeper discussion with penal lawyers in order to define terms in the norm as the primary accomplice and secondary accomplice "because what is being approved is a criminal conduct". The ANC proposed in a statement that the project must be send to the first debate.

The legislator José Antonio Domínguez, of the ruling Partido Panameñista (PPa), said that the intention of the regulation "is that there is no attempt on the part of the lawyers' association to cover money laundering acts" through the creation of anonymous corporations.

The Panamanian Government has indicated that the country risks consists in be again included in the gray list of the FATF if the Parliament does not approve this bill and that this would have negative effects on its financial system.

In the same session of the National Assembly, was approved in the third and last debate, the bill of Law 692 which serves to adopt the Tax Procedure Code (TPC), with which it is intended to simplify the payment of taxes.

The legislation was approved by the legislative plenary of the Parliament after having been returned to the second debate in order to make new reforms, as a result of the consensus between the parliamentary groups and the MEF.

Minister Chinchilla pointed out that most of the modifications were of form and not substance, as well as that this project represents the fulfillment of a debt of the Government towards its taxpayers. This code establishes procedures and dates through which taxpayers can enforce their rights in this matter, such as the creation of judges and arbitrations.

The Executive Branch maintains that the approval of this Tax Code is urged to comply with standards required by organizations such as the OECD and the FATF to get the country out of possible tax haven, said a statement from the NA.

The legal initiative, which now awaits the sanction of the President of the Republic for its promulgation, will provide both officials and taxpayers with the tools to streamline processes in the General Directorate of Revenues of Panama (DGI). With more than 300 articles, the CPT project provides the steps to follow on the payment of taxes, claims and other parameters.

The CPT will regulate for the first time the tax-taxpayer relationship by reason of the application of taxes, while fiscal matters (non-tax) will continue to apply the ordinary fiscal procedure as indicated by the Tax Code.

Chinchilla said during the debate that Panama is one of the last countries that accepts this procedure, since almost all of them have this mechanism. She also indicated that the project was presented in compliance with international standards with the ex officio prescription of taxes, thus contributing to the legal security of national and foreign taxpayers.

With the regulations, it will be possible, for the first time, to purge the current account of the DGI and establish the true figures of fiscal debits, as well as to eliminate the exhausting action of realizing scopes on figures that then must be declared prescribed.

The text explains the responsibility, mechanisms and procedures to follow in all procedures, and establishes the integration of an Administrative Tribunal and the conformation of its members, according to official information.

Source - Information from EFE


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