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President of Panama partially vetoes pension increase law for retirees

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  • Thu, 12/06/2018 - 09:47
Juan Carlos Varela
  • EFE - Archivo

Panamanian President Juan Carlos Varela partially vetoed a bill that establishes new taxes to pay an increase to pensioners and retirees, the State Communication Department reported today.

Bill 631, approved by the National Assembly of Panama on October 17, was partially vetoed by Varela for considering four of its articles as inconvenient and unenforceable, and forwarded it to the Legislative Body for reading at the special sessions it is currently developing.

The funding sources for these increases established in the bill partly motivated the reasons of the Executive for its partial veto.

The Government announced that a High Level Commission "is working on a responsible and sustainable economic formula to respond to the just aspirations of retirees and pensioners."

The High Level Commission is made up of the Deputy Ministers of the Presidency, Francisco Artola; and of Economy and Finance, Gustavo Valderrama.

"This High Level Commission reiterates the meeting announced for this Friday, December 7, which will assess options for new funding sources that do not affect other sectors of the country's economy," according to official information.

Retirees have expressed their approval of the bill, requesting Varela not to veto it as requested by business associations for their possible effects on the economy.

Franklin Ortiz, a spokesman for retirees, told reporters that he expected this veto, but said that apart from continuing to fight for the increase, they are open to dialogue and Friday's meeting with the government.

Bill 631 establishes an increase of between 35 to 60 dollars for retirees and pensioners of the Social Security Fund (CSS), as of January 1, 2019.

The increase covers retirees who receive pensions of from $ 500 to $ 1,500 per month.

The table proposed by the AN includes an increase of 60 dollars for those who receive a pension down 500; 45 dollars to those who charge between 501 and 1,000 dollars; and $ 35 to those who receive between $ 1,001 and $ 1,500.

The funding sources to obtain this increase will come from 7 percent of the amount of remittances sent abroad; 5 percent of the net annual profits of slot machines and gambling centers in casinos and gambling halls.

It also establishes that the amount collected in the selective tax to the consumption of beers, a 20 percent will go to the Disability, Old-age and Death of the Social Security Fund that maintains the payment of pensions for retirees; 5 percent to the Panamanian Institute of Sports, another 5 percent to the Institute of Mental Health for the Study and Addictions Treatment Center; and another 20 percent to the increases established in this Law.

The Panamanian Association of Business Executives (Apede) has criticized the AN for the approval of this bill, and asked Varela to veto it.

The Apede said on October 19 in a public statement that considers it "imprudent" that Parliament legislates on a matter "as relevant as the lifting of the tax burden, without a consultation process or in-depth analysis to determine the effects on the whole economy of these increases".

"The hasty way in which the bill was approved makes us reflect on whether the final objective of the deputies is only to regain the approval of the electorate ahead of the imminent electoral process and their reelection aspirations," said the business association.

Panama will hold general elections in May 2019 and a civil society campaign calls for "no reelection" of lawmakers.

The Apede noted that the "repercussions of the bill can be devastating" for the Panamanian economy.

Source-EFE

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