The Cabinet Council has authorized the execution of a containment plan that includes administrative and fiscal measures in the 2012 investment and operating budget for all public sector entities in the amount of $405.3 million.
From a press release from the Presidency of Panama:
In order to balance the State Budget for fiscal year 2012, the Cabinet has authorized the execution of a containment plan that includes administrative and fiscal measures in the operating and investment budget for all public sector entities in the amount of 405.3 million dollars.
Given the failure of the monthly payment system, income tax payments will be made in three installments a year and will be calculated using estimates.
According to an article in Prensa.com "With this move the government recognizes the failure of an unwieldy mechanism and that has not generated the expected revenues. Tax consultant Osvaldo Lau said that ‘the aim was to improve cash flow, but the exercise failed, because the absolute value of tax revenues did not meet expectations. '"
While legally the fiscal deficit may reach as high as 3% during 2011, the government had announced that it would not exceed 2%, which now looks impossible to achieve.
Tax revenues are not meeting the levels predicted at the beginning of the budget year, which seems likely to mean that Panama's fiscal deficit will go above the target of 2% of GDP set for the year
Mahesh Khemlani was appointed by the president, Ricardo Martinelli, as Deputy Minister of Finance under Decree 135 of August 31, 2011.
Deputy Khemlani, who replaces the deputy Dulcidio De La Guardia, was until his appointment, the Director of Public Credit, responsible for ensuring efficient programming, use and control of the means of financing obtained through public credit operations.
The Panamanian Government will auction $10 million in Treasury Notes on October 27th.
A public offering will be done through the electronic bidding system of the Panamanian securities market, reported Mahesh Khemlani, director of Public Credit.
From Pa-digital: "This issue is part of $275 million authorized on April 23 2007 ... to 'deal with seasonal requirements of the State Treasury and to back up the General Budget'".
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