IDB: Panama must increase tax revenues, reduce debt, and diversify economy

Photo of author

By Juan Francisco García

Tomás Bermúdez, manager of the Inter-American Development Bank in Panama and Central America, said the country must improve tax collection, reduce public spending and demonstrate to the qualifiers fiscal discipline in order to recover Fitch’s degree of investment.

The Panamanian economy requires diversifying its sources of income and also enhancing strategic sectors such as tourism and agriculture.

This was highlighted by Tomás Bermúdez, manager of the Inter-American Development Bank (IDB), at the Annual Conference of Executives (CADE), noting that it is essential to increase current income, that is, tax revenues.

The Directorate-General for Revenue (DGI) should be more efficient in terms of collection, he said.

He indicated that it is essential for the country to review special economic regimes where there are many tax exemptions. He mentioned that there is an opportunity to generate between 1% and 1.5% more to the economic contribution.

He also said that if the statewide plant is reduced by 10%, the country could save resources that can be used for investment.

Panama has clear advantages that it must take advantage of to continue its march towards inclusive growth, he stressed, adding that the country has a crisis of imagination and the country’s ambition was lost.

On the loss of investment grade on the part of Fitch, he indicated that the next government must have a clear communication with the key players in order to ensure that the demands that allow the country to be returned to the country.

It is essential that the country ' s major groups agree after the elections to conclude solutions and measures to make economic growth sustainable.

That all the forces of the country decide these are the three or four things that will carry us forward in the next 10 to 15 years, Bermudez said.

The IDB manager reiterated that Panama has the great challenge of reducing inequality, improving education and that economic growth also benefits rural and regional areas.

This article has been translated from the original which first appeared in Prensa