Panama: Change in Income Tax Payments
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.
Tuesday, July 3, 2012
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. '"
The Office of Administration agreed with the Chamber of Commerce in pointing out the unconstitutionality of the change in the method of paying income tax.
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.
Experts discuss the impact of a proposed 5% to 7% increase in the ITBMS tax, which is paid when transferring movable goods and providing services.
The reforms include provision for a fine for non payment of partial income taxes, facilitation of tax refunds, and streamlining of tax collections on luxury homes.
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