Panama’s Ministry of Economy and Finance Presents to National Assembly Landmark Legislation to Criminalize Tax Fraud

20 Jan

Panama City

President Varela’s Administration presented the bill as part of its ongoing commitment to greater financial transparency and international standards

PANAMA CITYJan. 19, 2018 /PRNewswire/ — Panama’s Ministry of Economy and Finance presented yesterday to the National Assembly new landmark legislation to include tax fraud in the Country’s Criminal Code, which, if passed, will represent the latest in a series of comprehensive reforms by the administration of President Juan Carlos Varela to ensure Panama meets and exceeds all international standards on financial transparency.

The initiative looks to add “Crimes against the National Treasury” (Chapter XII), to Title VII of Panama’s Criminal Code, and would protect Panama’s financial center as well as the logistical activities and legal services against possible abuses from people looking to evade taxes in Panama and other jurisdictions.

“The legislation is designed to target large-scale tax evaders, who have high incomes and do not pay their tax obligations,” said the Minister of Economy and Finance, Dulcidio De La Guardia, during his presentation at the National Assembly.

The initiative stipulates sanctions of 2 to 5 years, and fines up to 10 times the amount defrauded to the persons, for those who for their own benefit or on behalf of a third party, simulate, hide, omit, distort or deceive in the determination of a tax obligation to stop paying all or part of the taxes, with the intention of defrauding the National Treasury.

Minister De La Guardia pointed out that the project presented was carefully drafted and focused on punishing million-dollar evasions. “I want to make it clear that this bill does not aim to deprive anyone of freedom since it contemplates a mechanism to remove the crime in question from the criminal sphere, once the taxpayer meets his obligations,” the Minister added.

This announcement comes as Panama also announced last week that it will join the Multilateral Competent Authority Agreement (MCAA) of the Organization for Economic Cooperation and Development, a framework agreement that facilitates automatic exchange of information in accordance with the Standard for Automatic Exchange of Information on Tax Matters.

Last week, in Paris, Publio Cortés, Director of Panama’s Tax Authority signed the agreement and remarked that it “responds to the need for Panama to implement the automatic exchange of financial information with the group of countries through a more efficient mechanism than the bilateral route.” The MCAA allows Panama to decide the countries that it will share financial information with.

Photo credit: Blobber on VisualHunt / CC BY-NC-ND

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