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Panama: Change in Income Tax Payments. Will it Make a Difference?

Article Summary:

Given the failure of the Panamanian government’s monthly payment system, income tax payments will be made in three installments a year and will be calculated using estimates. The new formula will begin next September.

Photo Credit: Prensa

Original Article Text From Prensa via Google Translate :

MEF Recovers ‘Estimated’

A year and a half after implementing the Monthly Advance Income Tax (Amir), the Government has decided to resume the payment of income tax through the “estimated” that existed before the tax reform.

This formula will begin implementation next September. Taxpayers will have 3 annual payments, rather than the 12 required by the Amir.

The Deputy Finance Minister Mahesh Khemlani said the fact that the employer has to make payments each month could affect the country’s competitiveness and make the process “is tedious and administratively inefficient.”

With this move the government recognizes the failure of an unwieldy mechanism and that did not generate the revenues expected. The 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 the expectations.”

Over the past year, the collection of income tax to companies was lower than budgeted, having received $ 590.8 million when the estimate was $ 817 million.

Khemlani, however, denied that the estimated return is due to problems in collection.

“We had less revenue last year, but was offset in March this year when he filed the affidavit,” he said.

The project, already approved in Cabinet, has to go through the National Assembly. Will be the seventh reform that makes this administration to the Tax Code.

The president of the Chamber of Commerce, Halman Irvin said that the institution evaluates these changes, but that “in principle we are not satisfied with frequent changes are made to the Tax Code.”

Elsa Guanti, former president of the Union of Small and Medium Enterprises, said he prefers the Amir, because “it is the same as paying $ 500 to be paying $ 50 every month,” he said.

Link to Original Article:

From Prensa

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