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PANAMA: Debate to criminalize tax evasion

Wednesday, 11 October, 2017

Panama’s Minister of Economy and Finance, Dulcidio De La Guardia, presented a “comparative analysis of fiscal crime in Panama and other countries” on October 5, 2017, and called for a debate on the need to classify tax evasion as a criminal offense.

The study, Análisis Comparativo del Delito Tributario en Panamá y en otros Países, analyzed 27 countries, and found that Panama is one of the few countries in the Latin America region where tax evasion is considered an administrative fault, rather than a crime.

Most countries classify tax evasion as a criminal act and see it as a predicate offense to money laundering, and the Financial Action Task Force (FATF) recommends that it is defined as such.

Dulcidio De La Guardia emphasized last week that adopting such rules would bring Panama in line with international standards, and called for an open debate on the issue.

“Panama must ensure that its tax system maintains a comparative advantage over other jurisdictions and meets the international requirements of organizations such as the FATF,” said De La Guardia.

Some attendees of the study’s presentation raised concerns around the possible change, suggesting that the General Revenue Office would potentially have arbitrary reasons to initiate criminal proceedings, or use it for political purposes.

However, the Panama representative of the Inter-American Development Bank (IDB), Gina Montiel, has also called for talks to start: “Panama is heading in the right direction and has advanced, in the context of a changing world, and must use its advantages, its financial system, and its legal capacity to try to build the institutional framework and the instruments needed to facilitate agreements.”