The General Directorate of Revenue (DGI) will introduce new mechanisms of collections on the transfer of property and services tax (ITBMS) in an attempt to reduce evasion, which is calculated between 40 percent and 50 percent.
Revenue Director Publius Cortes presented his initiative yesterday at a meeting of the Panamanian Association of Business Executives (Apede) where large companies who acquire goods and services will be required to retain part of the purchase price to pay the ITBMS, which is 7 percent of the value.
That amount will have to be transferred immediately to the DGI.
For example, in a current transaction of $100, the seller would receive $107, of which $7 would be transferred to the government. But under the new law, large companies would only pay the seller half of the tax, or $3.50. Then both the buyer and seller would be required to submit payments to the government.
This requirement will only fall on companies that buy more than $10 million a year. Cortés estimates that, currently, around 160 companies would be impacted.
The ultimate goal of this initiative is to pursue companies that collect the tax but then do not pay it. The DGI also aims to detect income that is not being declared.
Cortes said that the initiative will go through a consultation period, but that he hopes to implement it by the end of the year.
"We want to focus on strengthening the control mechanisms, which are too flexible," said the official.