IMF Says Panama Needs To Step Up Pace Of Tax Reforms

by Mike Godfrey, Tax-News.com, Washington

22 July 2002

Following the conclusion of its Article IV Consultation with Panama, the International Monetary Fund (IMF) has urged the government to step up the pace of tax reform in order to boost the country's economy.

Predicting economic growth of around 1.2% in 2002, the international lending body suggested that Panama had fallen behind in implementing planned tax reforms, and: 'urged the authorities to press ahead - in the context of an ongoing National Dialogue - with their efforts to implement a revenue-enhancing tax reform, broaden the tax base by reducing exemptions, strengthen enforcement, and extend the VAT to cover services.'

Despite observing that relatively slow progress has made in the area of tax reform, the IMF praised the jurisdiction for its implementation of anti-money laundering and terrorist financing measures, announcing in a report on the consultation process that:

'Directors welcomed the substantial progress made in recent years in strengthening the supervisory and regulatory environment for commercial banks.'

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