Tax Amnesty to Reactivate the Economy

In order to reactivate the Panamanian economy that has been damaged by the outbreak of covid-19, the Ministry of Economy and Finance will present to the National Assembly a bill to extend the tax amnesty and approve new tax relief measures.

Tuesday, February 16, 2021

The Cabinet Council, led by President Laurentino Cortizo Cohen, authorized, today, the Minister of Economy and Finance, Hector Alexander to present to the National Assembly, the bill extending the tax amnesty, as well as new tax relief measures with a view to reactivate the national economy, explains an official document.

Check out the "System for monitoring markets and the economic situation in the countries of Central America", prepared by CentralAmericaData.

From the press release of the Presidency of Panama:

February 15, 2021. In a conference room courtesy granted to the director of the General Revenue Directorate (DGI), Publio De Gracia, he sustained to the Cabinet Council, that as a result of the pandemic that the country is experiencing, it has become impossible for all taxpayers to avail themselves and take advantage of the benefits of the Amnesty and Prompt Payment Law recently expired.
In general terms, the purpose of this bill is to extend the benefits of the amnesty previously granted to allow taxpayers more time to comply with the payment of their tax obligations, thus benefiting the entire universe of taxpayers of the Republic of Panama, while seeking to increase the collection of taxes.
 
Regarding the Tax Amnesty, the following measures are approved:
 
-Extension of the term until July 31, 2021 for the payment of delinquent taxes as of December 31, 2020, with the remission of 85% of interest, surcharges and fines.
-Payment arrangements are allowed until July 31, 2021, paying 25% of the nominal tax due as of December 31, 2020, and allowing its cancellation as of December 31, 2021. Likewise, payment arrangements entered into under previous amnesty laws may be cancelled as of December 31, 2021.
-Payment arrangements made under the Prompt Payment Law, which were to be paid by April 30, 2021, are automatically extended until December 31, 2021 for outstanding payments to be made.
-A 5% discount is granted in the amount to be paid in Income Tax and Estimated Tax to those taxpayers who have a gross income of less than 2.5 million balboas with respect to their 2020 sworn return, and pay within the 4 months following the entry into force of this law.
-Extension of the term until July 31 to file certain reports and omitted returns that should have been filed by December 31, 2020, condoning 50% of the fine generated by this late filing, provided that the remaining 50% is paid before December 31, 2021 and likewise, all those taxpayers who have certain fines established in the e-tax2.0 system, may cancel 50% of such fine by December 31, 2021 and the other 50% is condoned.

Other tax relief measures:
 

-Considering the proposal of the Chamber of Commerce, the figure of capitalization of retained earnings in a fiscal period is reinstated, with a view to provide companies with greater liquidity and working capital.
-It is clarified in Law 3 of 1985, which regulates the preferential interest regime in certain mortgage loans, that the benefit is granted to the mortgaged property for the term of the loan and, therefore, it does not affect if there is a change of owner.
-The payment of income tax is facilitated for those taxpayers whose ordinary line of business is not the purchase and sale of real estate.
 
-The benefit for prompt payment of 10% of the real estate tax is extended until April 30.



More on this topic

Tax Amnesty: Law Sanctioned in Panama

April 2021

President Laurentino Cortizo sanctioned Law 208 of April 6, 2021, which extends until December 31 of this year the validity of the tax amnesty, which initially arose in 2019.

With this initiative of the Executive, enacted in Official Gazette and which is part of the Economic Recovery Plan (phase 1), taxpayers will have until August 31, 2021 to make payments or enter into payment arrangements with respect to tax obligations not fulfilled until January 31 of this year, official sources informed.

Panama: Tax Amnesty to the End of 2021

March 2021

The National Assembly approved in third debate the bill that extends until December 31 of this year the validity of the tax amnesty, which initially arose in 2019.

The extension of a fourth General Tax Amnesty, which arose in 2019, approved, in third debate, the National Assembly and represents a savings of US$29 million to taxpayers, says an official source.

Tax Amnesty in Panama

March 2020

The National Assembly of Panama approved in second debate the draft law that extends the period of tax amnesty until June 30, 2020.

The initiative proposes that up to 85% of the total interest, surcharges and fines be recognized if payment is made after February 29, 2020 until June 30 of the same year, so that taxpayers may proceed to make their corresponding payments or credits.

Tax Amnesty Approved in Panama

September 2019

For interest, penalties or surcharges to be 100% forgiven, taxpayers will have until November 30, 2019 to pay their overdue taxes.

On September 26, the National Assembly approved Bill 78 of 2019, which aims to exonerate from interest, surcharges and fines of taxes that are delinquent and owed by taxpayers.

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