The private sector has requested that the debate on the bill to reform the tax code be suspended and changes made to the way property values are updated and the tax on them is calculated.
From a statement issued by the Chamber of Commerce, Industries and Agriculture of Panama:
PROPERTY TAX REQUIRES CONSENSUS
In the Chamber of Commerce, Industries and Agriculture of Panama, the same as other private-sector groups, we have respectfully requested suspension of the debate of Bill No. 43, "which amends articles of the Tax Code and other provisions" related to property tax.
A proposal has been made to change the tax exemption bracket from over $30,000 to $120,000 and for the rate for amounts above that figure to be set at 0.25%.
Although the process of cadastral appreciation in the capital city was suspended in November 2013, the private sector claims that the rule remains in effect and proposes amending it in order to minimize the impact of appraisals in the payment of property tax.
Business groups are working on the definition of an alternative to the Government's policy to value properties according to their commercial value.
An article in Prensa.com reports that as an example José Luis Ford, president of the Chamber of Commerce, Industries and Agriculture of Panama (Cciap) noted that the position of the chamber is "to search for a more 'real' number, because the value used (commercial value for determining the registry value) does not match reality."
The government will put out to tender a contract for appraising real estate in Punta Paitilla.
In order to update its real estate registry, the Ministry of Economy will hire companies to perform a massive number of appraisals in the metropolitan area. Some 12.000 lots will be evaluated.
“The discussion process was started with the participation of 10 interested companies”, reported Prensa.com, adding that the area of Paitilla was divided in 11 sections, and one company will appraise each.
Since the law was passed giving municipalities the right to collect property taxes, collection has increased by 2% annually.
However, the amount being collected for property taxes could grow substantially because their registered values are much lower than their real values.
In their analysis of the issue, Daniel Shea of the Costa Rican Tico Times, indicates that according to a recent study by the Technical Standardization Entity (ONT) of the Treasury Department, where they evaluate the value of properties in Costa Rica (the first one of this type in 10 years), 92% of properties have a value listing at $20,000 or less...