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Slump For Panama's Colón Free Trade Zone

by Mike Godfrey, Tax-News.com, Washington

11 March 2016


The revenue of Panama's Colón Free Trade Zone in 2015 totaled USD114m, lower than the targeted USD121m, and down 7.6 percent from the previous year, according to a statement from the country's National Assembly.

The statement said that the reason for the poor performance is a decline in trade with two of the zone's main trading partners, Colombia and Venezuela. A weakened currency in Colombia and economic contraction in Venezuela have affected both countries' international trade activity.

Surse Pierpoint, the General Manager of the Colón Free Trade Zone, said that the zone is seeking to boost investment from other countries, including the United States, to offset the decline in investment from Colombia and Venezuela.

Pierpoint noted that 16 new companies have expressed an interest in launching operations in the free zone this year.

In a separate statement, the National Assembly said that a package of proposals to increase the competitiveness of the Colón Free Trade Zone has been approved in an initial debate. The proposals, which include new tax breaks, will cost the Government USD25m in lost revenue.

Currently, the benefits of operating in the Colón Free Trade Zone include zero percent import and export duties, and zero percent income tax.

TAGS: tax | investment | Venezuela | tax incentives | export duty | interest | corporation tax | Colombia | United States | tax breaks | import duty | currency | trade | individual income tax | Panama | free trade zone

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