The program will support reforms to improve investment programs over the medium and long term in Panama, fiscal sustainability and treasury management; deepen local debt markets and modernize public financial accountability in the public sector. This operation, the first of four policy-based loans, will be disbursed in one payment.
With this operation, the country should implement tax reform legislation which came into force in 2010, paving the way for increased tax revenues and improving the quality and equity of the tax system. The reform includes modernization of international tax policy, the creation of a Tax Tribunal, the design of a large taxpayer unit in the Department of General Revenue and the adoption of regulations to implement fiscal printers.
The program will also support the consolidation of public finance management. The new system, which will follow the criteria of prudence and transparency established by the Fiscal Responsibility Act, will integrate the processes including investment programming, budget management, treasury management, debt management, public and governmental accounting.
This project will help Panama to:
* Maintain a stable macroeconomic policy
* Increase tax revenues and improve tax equity
* Provide transparency and international tax coordination
* Streamline the process of inspection and tax collection
* Strengthen monitoring and evaluation of public investment plans of the Central Government to create the Single Treasury Account
* Adopt a multi-year process of results-based budget management
* Deepen local market debt
* Create an automated, online, public accounting
The program is the result of many years of support which the IDB has provided Panama to continuously improve its public financial management, a process led by the Ministry of Economy and Finance.
Government and the Inter-American Development Bank (IDB) signed a $200 million loan aimed at strengthening the fiscal sector.
The loan is part of a package of six transactions approved by IDB this year totaling nearly $450 million.
The fiscal strengthening program, approved by BID´s Board of Executive Directors last February, aims to improve treasury accounts and protect funding for social programs which benefit low-income groups.
The IADB loan to Guatemala for the purpose of "generating more tax revenue" is another example of the current inflation of funding promoted by international bureaucracy to pay the salaries of national bureaucracies.
An article by Jose Raul Gonzales in the blog of Guatemala's economic think tank CIEN, reveals one of the many cases in which international financial organizations, supposedly created to help nations develop, engage in financing consulting activities, which end up being just expenses instead of financing real economic sectors.
A $40.5 million loan will prevent deterioration of fiscal situation due to the global recession.
The Inter-American Development Bank approved a $40.5 million loan to that will provide budget support for Nicaragua and help finance measures that will increase revenue collection and efficiency and transparency of budget execution.
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