Panama’s Government Presents National Assembly With Legislation To Criminalize Tax Evasion

When in 2016 the Panama Papers scandal exploded, it became the largest journalistic leak in history. This was a global corruption organization that involved 140 politicians and officials from around the globe, including 72 former and current world leaders and celebrities, in a secret "offshore" company, everything in order to avoid taxes in their countries and hide their fortunes. All of this was done through one of the world's largest offshore law firms, Mossack Fonseca, which resides in Panama.

The information also revealed the involvement of numerous art dealers, FIFA and UEFA officials, weapon dealers, star athletes (such as soccer superstar Lionel Messi). The involvement of some current and former heads of state was revealed through their aides, or close friends, such as Enrique Peña Nieto, who is involved through his "favorite" contractor, Juan Armando Hinojosa; Cristina Fernández de Kirchner and Néstor Kirchner, who were involved through their longtime aide, Daniel Muñoz, only to name a few.

Former Egyptian president, Muammar Qaddafi, current Argentine President Mauricio Macri, Iceland’s prime minister, Sigmundur Gunnlaugson and current Ukraine President, Petro Poroshenko are also mentioned. From Spain, Pilar de Borbón, sister to former Spanish King Juan Carlos, as well as filmmaker Pedro Almodóvar and his brother were also involved. Edith Gonzalez was also one of the many personalities cited in these documents.

After the scandal, Mossack Fonseca law firm informed that offshore companies are available worldwide and are used for a variety of legitimate purposes. “If we detect suspicious activity or misconduct, we are quick to report it to the authorities,” it said. “Similarly, when authorities approach us with evidence of possible misconduct, we always co-operate fully with them.”

Now, more than a year later, to strengthen Panama's financial system and further prevent it from being used for money laundering, Panama's government has announced it will present a bill during the next period of the National Assembly to criminalize tax evasion by including tax fraud in the country's Criminal Code.

Panama's Minister of Economy and Finance, Dulcidio de la Guardia, presented the bill to the Cabinet, which was approved by President Juan Carlos Varela and his Ministers after several months of debate.

According to the information shared on behalf of the Government of Panama to Latin Times, the legislation stipulates penalties up to 5 years and a fine of up to 10 times the amount defrauded to any persons who, for their own benefit or for the benefit of a third party, simulates, hides, omits, falsifies or deceives tax obligations with the intention of defrauding the National Treasury.

In addition, the bill states that tax fraud will be considered when the amount defrauded in a fiscal period is equal to or greater than three hundred thousand U.S. dollars ($300,000.00). The bill also establishes that any person who pays the amount of the defrauded tax obligation and its formal attachments unconditionally and totally, before a judgment of first instance, will be exempted from punishment. This benefit will be granted only once for each natural or legal person.

Panama's private sector, the Chamber of Commerce, Industry and Agriculture of Panama, and the Panamanian Association of Business Executives, among others, where part of the bill in order to seek consensus and address a range of suggestions on the issue.