From May 2019, foreign customers will have to declare to local system banks that their funds meet their country's tax requirements.
The Superintendence of Banks of Panama (SBP) approved Agreement 02-2019, which implements the recommendations of the Financial Action Task Force, which consists of expanding the required due diligence measures of banks with their customers.
The tax burden grew from 13.4% in 2013 to 14% in 2016, both due to the delayed effect of the tax reforms in Honduras and Nicaragua, as well as better management on the part of tax entities in Guatemala and Panama.
From the Regional Economic Report (IER) 2016-2017: Opportunities and challenges for Central America, by the SIECA:
In 2016, the ratio between total expenditure of central governments of the countries of the region and GDP remained almost unchanged from the previous year, going from 18.3% to 18.6%.
From the report "Macroeconomic Profiles: 8th edition", from the Central American Institute of Fiscal Studies (Icefi):
The Central American Institute for Fiscal Studies (Icefi) presented its most recent edition of the Macro-Fiscal Profiles of Central America, which contains an analysis of the fiscal situation of Central America and each of the countries of the region, at the end of fiscal year 2016, as well as the main lines contained in the budgets approved for 2017.The publication includes in this opportunity a revision to the main indicators related to the fulfillment of the Sustainable Development Objectives 2030 -ODS 2030- and raises the urgent need to make progress in a new fiscal agenda that allows the effective attention of these commitments in the short term.
The amendment to the Tax Code, partially approved by Congress, omits the concept of "global income", and establishes "territorial income".
Latribuna.hn reports that "...The Bill for a new Tax Code was drafted by the government, employers and a sector in the social economy, and during the dissemination it was said that the change to "Territorial Income represents a setback in the fight against capital flight."
The ICEFI highlighted the achievement in reducing the fiscal deficit, but noted "weaknesses in access to information and opacity in the management of public resources."
From a statement issued by the ICEFI:
The Icefi is concerned about the tax changes in recent years because part of its impact is an increase in the regressivity of the tax system, less fiscal space for social spending, as well as a latent opacity in the discussion on the use of State property and new fiscal institutions.These negative effects detract from the achievements made in terms of macro-fiscal stability in the medium term, we warn, this will increase democratic ungovernability, public distrust and restrict the scope for sustainable, sustained and inclusive economic growth.
The countries facing the greatest risk of fiscal unsustainability within three years are El Salvador and Honduras, followed by Costa Rica and with less risk, Nicaragua and Panama.
From the "EconomicOutlook"section of the V Report on the State of the Region 2016:
A bill prepared by the Executive and the private sector includes the concept of a single tax and the creation of an administrative court for tax matters.
The bill must now be analyzed and approved by Congress. In addition to regulating exemptions, the new code creates theSuperintendency of Tax and Customsand the Tax Administration Department.
The pressure being put on Panama in the international context has finally forced it to make agreements to exchange tax information, with the most noteworthy being the agreement with Colombia because of the negative implications it has for the Panamanian banking sector.
Prensa.com reports that "...According to the Superintendency of Banks of Panama, at the end of 2015, deposits in the international banking center of Panama from Colombia totaled $6.251 billion, with the South American country being the main center for funds originating from foreign sources. "
From 2014 to 2015 the size of central governments remained constant at an average 18.5% of gross domestic product (GDP).
From the introduction of the report: "Macrofiscal Profiles: 6th Edition" by the Central American Institute for Fiscal Studies (Icefi):
2015 proved to be a period of low tax advance for the Central American region. On average, the size of central governments remained constant compared to 2014, at 18.5% of gross domestic product (GDP). However, not all nations maintained this trend in the same way. While the governments of Nicaragua, Costa Rica and El Salvador, some of the largest fiscally in the region, continued to increase their participation in the economy, reporting increases of 1.5, 0.7 and 0.7% of GDP, respectively, the Government of Guatemala - one of the smallest in the world became even smaller, being reduced by 1.2% of GDP. For its part, the Government of Honduras reported a small decrease of 0.2% of GDP, fully converged with its policy of fiscal austerity, while that of Panama had a transient contraction of 1.4%, reflecting a reorganization established by the new administration and that, according to the plans for 2016, will be reversed in full.
Legal tax engineering is a mandatory business practice for anyone who wants to be competitive in today's globalized world, and only those who are not entrepreneurs can afford to refuse to acknowledge this fact.
EDITORIAL
With the same firmness that we criticize businesspeople who evade taxes or bribe officials to get a contract, we must defend every business practice which is framed within the law to pursue the best use of available resources to generate wealth through the production of goods and services, which is what businesses do.
A proposal has been made to include new revenue figures, notify companies via email and to make audit processes simpler.
The bill that the Executive Directorate of Revenue has under public consultation envisages changes in the mechanisms through which requests are received or delivered as well as notices regarding tax payments. Laprensa.hn reports that "...
While the Northern Triangle countries strive to reduce or at least maintain constant levels of debt / GDP, Costa Rica and Panama move further away from fiscal discipline, the former at the greatest pace.
From the introduction of a report entitled "Macrofiscal Profiles : 4th Edition." by the Central American Institute for Fiscal Studies (Icefi):
In the area of prioritizing economic stability over the availability of resources to finance development, the countries of the northern triangle in Central America, have generally shown a significant effort to reduce or at least maintain constant levels are Debt / GDP and the fiscal deficit, which means that, tacitly, the fiscal rule of zero growth of public debt is being used, despite the impact this may have on the welfare of the people.
As the region gets ready to start complying with the US law FATCA, OECD countries are already working on a Single Global Standard for automatic exchange of information.
FATCA could now be joined by the European OECD countries Single Global Standard for Automatic Clearing of CRS Information (Gatca), "... allowing tax information on their residents to be shared between them."
Many of the officials working in Central American governments are annoyed at the idea of the information they handle being accessible to citizens, and one way or another, they are impeding its availability.
EDITORIAL
"- Send a letter to Mrs Fulana, the person in charge of authorizing the release of information you have requested, stating the reasons for your request".
All of the OECD countries and others such as Costa Rica have agreed to the automatic exchange of tax information.
From a statement issued by the Organization for Economic Cooperation and Development (OECD ):
Paris, May 6, 2014
Bank secrecy for tax purposes is coming to an end because countries, along with major financial centers have committed to the automatic exchange of information between jurisdictions.