Progress in Tax Evasion Law

The law project approved in the first debate in Panama establishes penalties of two to four years in prison for evasion of $300,000 or more and could be used as a precedent for money laundering.

Wednesday, October 31, 2018

The Commission of Government, Justice and Constitutional Affairs of the National Assembly, approved in the first debate the law project 591, which considers tax evasion as a crime.

Regarding the law under discussion, last week the business sector requested that the amount defrauded to be considered a criminal offense be increased from $300,000 to $500,000, however, the amount remained at $300,000 as originally proposed.

See "Controversial Request to Reduce Penalties for Tax Evasion"

Regarding what was approved, reports that "... To introduce tax evasion as a precedent offence of money laundering, a new article of the Criminal Code was approved (Article 254-A), which establishes a penalty of two to four years. In addition, this general type indicates that anyone who reasonably presumes that the money handled is of illicit origin will be punished. In the case of evasion, the new article states that whoever handles the money "knowing that it is the result of crimes against the National Treasury" will be punished."

In the case of money laundering, the article adds that "... To have money laundering, there must be a previous offence from which the illegally obtained money originates. The current Criminal Code establishes that if the illicit money originates from corruption, drug trafficking, terrorism, human trafficking and a long list of illegal activities, the penalty is 5 to 12 years in prison."

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Panama: Strengthen Penalties Against Evaders

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The law that criminalizes tax evasion was approved by the National Assembly when the amount defrauded in a fiscal period of one year is equal to or greater than $300.000.

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Regarding the request made by the Chamber of Commerce, Industry and Agriculture of Panama, the Ministry of Economy and Finance (MEF) explained that "...

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From a statement issued by the Presidency of Panama: