Panama Finance Minister: Tax Credit Fraud Won't Impact State Revenue

Panama's Minister of Economy and Finance, Felipe Chapman, assured that a recently uncovered fraud scheme involving tax credits will not affect the state's revenue collection.

Chapman described the trafficking of tax credits as a practice of long standing in Panama, admitting that it has exposed significant weaknesses in the country's financial and administrative systems over the years. He noted that banks, companies, and insurance firms have been deceived by such schemes, highlighting a lack of adequate attention to the problem historically.

These statements come in the wake of investigations revealing that the E-Tax system of the General Directorate of Revenue (DGI) was allegedly compromised by a network of officials, former employees, and private individuals, including lawyers and bankers. The Public Ministry estimates that this network caused approximately $40 million in economic damage to the state.

“

This country has had tax credit trafficking for as long as I can remember, which has even ended in harsh human consequences, which is a long-standing problem and one to which no one has paid due attention and in which banks, companies, insurers have been deceived over the years, and that demonstrates the weakness of our system.

Despite the fraud, Chapman urged taxpayers not to lose confidence, emphasizing that the government is actively working to reinforce institutional controls and ensure the transparency and proper functioning of the tax system. He pointed out that the current administration did not cause these weaknesses but is actively addressing them, with valuable technical assistance from international organizations.

As part of the "Operation Pandora," a judge ordered the provisional detention of 13 individuals and house arrest for three others following charges related to financial crimes and offenses against public administration. The investigation is ongoing, with authorities committed to strengthening the tax framework.

“

These problems and these weaknesses were not caused by this administration – it is important to emphasize. We are addressing the weaknesses, and I must acknowledge the help and technical support we are receiving from many international organizations expert in the subject.