The Panamanian Government announced that it decided to withdraw from the National Assembly (AN) a bill to expand the fiscal deficit and access 300 million dollars for investment spending this year, which had generated resistance among the opposition majority in parliament.
"The withdrawal of the Assembly project will broaden the consultations with different social sectors of the country, generating a technical debate, away from political passions," Economy and Finance Minister Eyda Varela said in a statement on Thursday.
The approval of this tax exemption of 300 million dollars was one of the challenges the Government faced in Parliament, whose overwhelming majority had announced that it would submit the approach of the Government of President Juan Carlos Varela to a conscientious debate.
Minister Varela said Thursday that she "decided to withdraw the AN project" in order to "hold a technical debate, away from politics and situations that divert the substantive discussion and the true objectives of this bill" , which she presented last July 5.
"We maintain our interest to have the reform of the Fiscal Social Responsibility Law and the Savings Fund of Panama and to give continuity to the dynamics of the labor market in construction works in the public sector," Minister Varela added in her statement.
He stressed that the project that will be withdrawn "is a technical document designed responsibly with the objective of maintaining the levels of investment (public), which allows to continue with the economic growth registered in recent years."
"The project includes an article to expand the investment capacity this year and thus streamline works that allow generating more jobs in water projects, housing, health, education and tourism sector," said the official letter.
The president of the Legislative, the opposition deputy Yanibel Ábrego, said on Wednesday during the installation of Parliament's Budget Committee that it would promote a broad debate on the request for the fiscal exemption of 300 million dollars from the Government through the reform to the Fiscal Responsibility law.
"We have not said that we will not approve the 300 million dollar dispensation," said Ábrego, of the opposition Cambio Democrático (CD), the second parliamentary force with 24 seats, adding that the Assembly would open "a broad debate" on the one that "all sectors" would participate.
President Varela, during his last annual speech to the Parliament on July 1, announced that he would present the proposal to increase the deficit this year, among other reasons due to the heavy blow that the one-month strike of the neuralgic construction sector caused for the economy.
He then urged the deputies to retake "the state agenda with which we worked in the early years", when the minority Panameñista Party (PPa, ruler) maintained a pact of governability with the opposition PRD, the first parliamentary force with 26 of the 71 seats, which ended last December after 3 years of validity.
"Although I recognize that I have had differences with this AN, this does not prevent us from finding ways of understanding to continue working in this election year for the benefit of the Panamanian people," Varela said on July 1.
The Government has also said that the requested tax exemption for 300 million dollars would come from resources to cover the cost of a raise in the electricity bill announced at the beginning of this month, but which was suspended and assumed by the State due to the wide rejection of the population.
"If the requested tax exemption is not approved (...) and the Government assumes the entire" rate "adjustment, other areas of the functioning of the State will be affected," the president warned last Friday.