Panama Investor Blog

Panama Investor Blog

So you’re thinking about Panama? Maybe as a place to invest, live or just spend a few months a year.  Well, you need to do your homework and there is no better place than the Internet to find out about Panama. But, you will have to wade through a lot of information in order to get to what you hope is the truth.

That is, unless you consider a free subscription to Sam Taliaferro’s Panama Investors blog. Why trust Sam? What makes him such a reliable source?

It is not because Sam has lived in Panama since 1997 or because he has invested millions of dollars into Panama’s real estate and resort markets. It is not because he is credited with having started the current Real Estate boom that is bringing billions of dollars of foreign direct investment into the country or the fact that he has been quoted by such important publications as the Economist, Fortune, Financial Times and hundreds of blogs and news articles around the world. It should not be because he is married to a beautiful Panamanian woman and that they have three beautiful Panamanian children. None of these are good enough reasons to trust his judgment.

The real reason can be summed up in two simple words, honesty and Integrity. Sam has the honesty to tell it like is, the good, bad and ugly of Panama, and has been doing so for nearly four years with his Panama Investor blog. He has the integrity to tell you the truth about important issues that may affect your investment, lifestyle or security in the country, even when it may hurt his own investments. This is why thousands of people from all over the world subscribe to this hard-hitting, “tell it like it is” Panama Investor blog.

At least once a week Sam sends out an email to his subscribers with the weeks headlines that may include information on the many changing laws regarding immigration, taxes, security, banking, real estate, structuring and many other subjects. He regularly post articles from local papers and translate what he considers important to his readers. He also regularly posts about tourism and master planned communities all around the Americas in order to compare them to the real estate opportunities that lay in Panama.

Sam spends hours each day scanning the many news articles that come out and filters it down to the important information you need to know. Each post provides commentary on why this matters to him and why it should matter to you. Over 3000 posts are archived in categories so you can find information on just about every investment subject.

So if you want to read blogs or websites that tell you all the great things about Panama, this is not the one for you. But if you want to know about the safety of investing or living in Panama, from someone who really cares about the future of the country, you should subscribe. After all, it’s free, so what do you have to lose except some valuable time. Let Sam spend his valuable time so you can maximize yours!

Los Faros non-progress report

The $600 million mega project, Los Faros was announced back in 2006 with much fanfare and held up as additional proof that Panama was the choice of major project developers from around the world. With over 2000 apartments and a 200 room hotel, it was scheduled to be completed in 2009.

The name Los Faros, which in English ironically means "lighthouse", has apparently led investors into the dangerous reefs of the many partially completed or never started Panama projects. The Spanish company behind the project, Grupo Mall, was touted as a major player and a sure bet. I was in Spain at the residential tourism  Expo in 2006 where I witnessed the hype first hand as the glitzy marketing of the project was being touted mostly to European investors. Grupo Mall's booth was one of the biggest and most extravagant in this huge exposition with thousands of developments from all over the world. A model of the project showed the entire city with this mega structure dominating it. 

I made a post with photos about the project in April 2006 while at the expo and if you read the comments below the post, you will see how many promoters with "special connections and deals" responded to an inquiry to buy expressed by a reader. This will give you some idea of the hype associated with this project.

That was then and this is now.  Almost four years later a hole in the ground  sits where once grandiose dreams of lifestyle were to be made. Nothing more to show but scale models, computer renderings and unfulfilled contracts. Many people in good faith made down payments on apartments and now more than likely will not see a return of any kind as Grupo Mall apparently has no property in their name in Panama. They now tell investors that they were only the "marketing agent" and were hit by the word financial crisis. One needs only look at the dates promoted by the company (Start in 2006 finish in 2009) to see that if that were the case, the project should have been more than half completed when the crisis hit. Panama is littered with such projects and I would bet there are hundreds of millions  of dollars in deposits that will never be returned making Panama one of the biggest real estate debacles in the western hemisphere, and it ain't over yet!

Photo From La Prensa

Panama shipyards down 25%

One would think that with fewer ships being used worldwide the demand for repairs of those in operation would be higher, but as this story points out, ship owners just don't have the money to repair their vessels.

Wilfredo S. Jordan
wjordan@prensa.com wjordan@prensa.com

  Shipbuilding is an important link in the development of any economic activity linked to the cargo or the exploitation of maritime resources

  The shipbuilding industry, which includes work for the construction and repair of ships, has been hard hit by economic crisis. On average, the repair of boats has dropped by 25% compared with 2008, said chairman of the Chamber of Shipping of Panama, Marvin Castillo.

  Many boats are arrested, the shipowners and shippers do not have the financial resources to carry out repairs.

  "We saw a first half of 2009 was very active, but as the crisis has spread in the maritime sector, has diminished the confidence of international shipowners.  Results are still pending to recover the confidence of the owners in the industry, the repairs to begin again, "Castillo said.

In Panama operate Bayano Shipyard, located in Port Coquira; Shipyard Juan Diaz, Juan Diaz, National Shipyard in Vacamonte; Braswell Shipyard International, Balboa; Shipyard International Veracruz, Veracruz, and Industrial Shipyard Mount Hope, Division Industrial Panama Canal Authority, located in Columbus.

There are also two companies engaged in dry dock repairs through rental spaces in shipyards: Engeniereers Marine Corporation (Panama) Inc. and Talleres Industriales SA

  They only have dry dock: Braswell in the Pacific and Atlantic ACP side. National Shipyards and ACP have also sincroelevadores.  The remaining firms have ramp stranded or outdoor structure that allows them to perform repair work on naval vessels.

Commercial Fishing

The shipyards engaged in repairing fishing boats have had to redirect their activities toward other types of vessels such as boats and yachts.  "Most of the work in the fishing takes place during the closed season," said Alejandro Gerbaud, manager of the National Shipyard SA

  In the shrimp it affected the high price of fuel used to move the boats and low prices for less product consumption in the U.S. and Europe.

Panama Debt Rating Raised to Positive by S&P

Panama’s credit-rating outlook was raised to positive by Standard & Poor’s, putting the Central American country on the cusp of an investment-grade rating, as tax increases and faster economic growth help keep the budget deficit in check.

Read the rest at Bloomberg;

Deep sea aquaculture startup in Panama prepares for harvest

I have posted on this company before because I find it fascinating that a sport fish can be farm grown in deep water. The fact that it is being accomplished here in Panama makes it even better, Interesting read from Cleantech.com.

Cobia fish may be the next big thing in high-end restaurants, replacing the now high-priced Chilean seabass, which is suffering from illegal and overfishing.

New York-based Open Blue Sea Farms specializes in developing environmentally safe and sustainable deep ocean aquaculture methods, known as free-range fish farming, the company’s Executive Vice President Clive Zickel told the Cleantech Group.

But Zickel said even though the company is initially focused on raising cobia—a white, firm fish often caught for sport—it is planning to grow other species as well.

Zickel said most fish farming tends to be done close to shore or in ponds, where the fish often swim in dirty water, eat what they excrete, and mercury and polychlorinated biphenyls can become a problem.

“Out in the deep water, our lab tests don’t show any of that,” Zickel said.

The fish at sea are raised in large geodesic domes, about the size of a six-story building, which are raised only for cleaning. The structures are more expensive to build and secure to the ocean floor than traditionally-used methods.

However, Zickel said the financial trade off is that by feeding the cobia a healthy fish meal diet and allowing them to be raised in an environment more like their natural habitat, a better product results that can become cost efficient in time.

Flat Tax back on track

I am very happy to see that the government still plans on implementing the flat tax system. This will be a big boon to business and a simplification of the existing and confusing tax system currently in place.

La Prensa

The government has given a new setback to the filing of tax reforms, whose most important change would be the replacement of Alternative Calculation of Income Tax (CAIR) by applying a flat tax (flat rate or only).

  The original plan was to introduce this reform last October, but then the long process of discussion and generated positions against last fiscal adjustment law adopted last September, the Ministry of Finance reported that the tax changes "integral" would postponed to 2010.

  However, the president, Ricardo Martinelli, said the Panamanian tax change will model during the special sessions of the National Assembly, scheduled for the recess of the legislature in November and December.

  Deputy Finance Minister, Dulcidio Guard, said the new initiative are reviewing the alternative calculation of income tax, lower tax rate on income of individuals and corporations across the flat tax and elimination of various taxes that have little revenue, but would not specify.

The official said he had met with the industry to explain some ways to achieve increased effective rate of tax.

  With just days to the end of November, the official said they are committed to the private sector to review the reform before it is submitted to the Assembly.  However, business associations are concerned about the dimension of the reforms against time for consultations.

 Ruben Castillo, president of the Panamanian Association of Business Executives (APED), said the tax issue is difficult, complicated and technical and can not "move quickly", referring to the discussion in the Assembly.

  Hopes that the reform is stable so it does not send a bad signal to investors that the revenue generated is invested not in form.

  Adolfo Linares, president of the Chamber of Commerce and Industry, suggested that points to a genuine fiscal policy to avoid falling into a purely tax collection reform parameters.

  For Gaspar García de Paredes, president of the National Business Council (Conep), fiscal policy must meet the mission of maintaining the vitality of the economy, instead of collecting more taxes and lose taxpayers.

The End of the World

A reader sent me this article on Dubai world and the sad story of the bust of one of the grandiose residential real estate projects of all time.

Read the complete story at Time.com

Depending on your point of view, the World is either the apex of mankind's ingenuity or a cautionary tale about the feverish excesses of Dubai's 21st century boom. Each island was selling for $15 million to $50 million, by invitation only: its developers were pitching the spits of land to tycoons, sportsmen and celebrities. But when Dubai's property market imploded last year, dropping more than 50%, cheeky headlines in the international press suggested that "the end of the World" had arrived. One dealer was quoted as saying that the multibillion-dollar project had been postponed "indefinitely."

Read more: http://www.time.com/time/magazine/article/0,9171,1929221,00.html#ixzz0WNEdcQSl

Cleaning up Panama's financial reputation-The Economist

The Economist weighs in on the OECD issue in a "fair and balanced" way, pointing out the main issues and the argument Panama puts forth in order to maintain its sovereignty.

Key excerpt: Mr Martinelli cannot be seen as buckling to foreign pressure if he is to maintain his popularity. “Unlike Caribbean islands, Panama has a real economy, which makes negotiating treaties more complicated,” says Dulcidio de la Guardia, the vice-minister of finance. “Panama wants to be a responsible member of the international community. But it will always take care of its interests.”

Read the whole article on The economist website

Putting coffee beans into perspective

I have always been fascinated by comparing the relative size of things from the infinitesimal to the universe. Here is a most interesting journey you can take in 10 seconds that puts some things into perspective starting with the humble coffee bean.

Just click here and then use the slider at the bottom. Take a journey into the world of the very small.

Spend some time on the Learn genetics website and see some other very interesting interactive learning tools. Enjoy!

Noose to tighten on U.S. citizens with foreign bank accounts

The Obama administration is making it clear that they will do everything they can to keep money from the leaving the country and this latest maneuver may just end the ability for U.S. citizens to use offshore bank accounts entirely. Not because there will be a law against it, but because the penalties imposed on foreign banks for refusing to disclose beneficial account holders will be so punitive that no bank will want any U.S. citizens as customers.

You do not need a crystal ball to know that the future for the U.S. taxpayer with more than most will be "asked" to pay more than their fair share in order to spread the wealth through the administrations tax and spend policies. If banks won't accept U.S. clients then all monies held outside the U.S. would have to be repatriated. 

Bob Bauman gives a good overview of the latest attack on individual sovereignty on his blog.

Excerpt;

As is well known, for several years offshore tax havens and Americans who dare to exercise their right to engage in legal offshore financial activity, have been under continuing attack by left wing, redistributionist Democrats, including then senator, now President Barack Obama.

Now, with Obama's personal blessing, congressional Democrats have introduced a radical legislative proposal that would give the U.S. Internal Revenue Service (IRS) new weapons to "detect, deter and discourage" the use of foreign bank and other financial accounts that might be used for avoiding U.S. taxes.

The questionable basis for this latest leftist assault on Americans' personal and financial privacy is the unproven allegation that millions of Americans are evading billions of dollars in taxes by hiding cash and activities offshore.

Read the rest of the story here...

Dirty Diamonds in Panama?

Last month I posted several articles from the local press praising the opening of a new diamond center here in Panama. On the surface it looks like another good thing to come to the country, but according to an article in International Relations and security network, it could turn into another black eye for the country. The article goes into detail about the illegal diamond trade in Latin America and the connections to Chavez and Iran.

Excerpts: Leaders from the global diamond trade met in Panama City on 13 October to persuade President Ricardo Martinelli to establish a tax-free zone for Latin America’s first regional diamond exchange. The lobbyists won over Martinelli, who by 19 October had publicly committed to support legislation in the Panamanian National Assembly designed to give free trade zone status to the Panamanian Diamond Exchange (PDE).

Panama will also work to pass the necessary legislation to join an international diamond trading regulatory regime known as the Kimberley Process, Martinelli said.

But observers worry that Panama’s role in laundering illegal diamonds mined in South America might only grow as the Central American country becomes a regional hub of the Latin American diamond trade.

Read the rest of the story here...

Credit drives construction

Construction continues to grow in Panama mostly due to the increase spending on public housing and infrastructure projects by the state according to La Prensa.

La Prensa

Domestic credit to private sector amounted to 21 thousand 559 million dollars by the end of August, an increase of 3.3% compared to the same period a year earlier.

  Credit for construction maintains a sustained growth driven by increases in the rows of public housing, which through August totaled $ 1.172 billion, an increase of $ 408.4 million or 53.5% over the same period in 2008, when it stood at $ 764 million, according to the Superintendency of Banks.

  Last December, these loans were $ 995.8 million, which analysts say means that the bank maintains its policy of paying for construction projects in progress.

  Banks are more cautious yes to fund new projects, which do not have a significant percentage of sales, according to various industry sources.

  In the field of infrastructure loan portfolio reaches $ 268.18 million, an increase of 77.9%, compared with August last year.

  Meanwhile, mortgage financing has a positive momentum driven by increases in home mortgage lines (10.5%) and mortgage store (10.6%).

Cero Punta, the toxic capital of Panama

It is unfortunate that one of the most beautiful areas of the country is also one of the most toxic according to this article in La Prensa. " "In Cerro Punta people bathe daily with pesticides, exposing themselves to risk predictions reserved" he said.  Carranza concerns that when people use agrochemicals is exposed to large doses of these hazardous substances."

And what of the people who consume these products? "Among the pesticides that are seeking to ban lindane, paraquat, malathion and carbofuran, widely used in agricultural production in the country, especially in the highlands of Chiriqui, from which over 60% of vegetables and vegetable consumed in Panama."

According to the article only 5% of the vegetables in Panama are organic because the farmers don't want to spend the money needed to produce them. And of course the consumer is not educated to the dangers in of eating these contaminated products and if they were, would they be able to afford them?

Ministry promises "fair" prices for ROP land

The battle over ROP land along coastal areas has heated up as many gathered at the ministry yesterday to air their concerns about the new law. Although there are many details involved, the bottom line for the state is money and how much they can  charge per hectare to those who want to retain and title the land. For many foreigners who purchased ROP from local farmers this comes as a complete shock as they did not expect to have to pay more than they already have. For many it could mean the end of their dreams of retirement in Panama as they may not have funds enough to buy the property from the state. Many investors who bought ROP as speculation may also find it difficult especially in these tough real estate times. Although the Ministry of Finance promises to be fair in the pricing structure, one has to wonder what "fair" means to them. If they want to charge fair market value for the properties it cold be devastating to those who have already paid once for the property. If the ministry does make the payment small so as not to adversely affect the local farmers they will surely put in place an evaluation for the property that will be much higher in order to begin taxing the property on a yearly basis. After all, this is the real reason ROP land is being titled, IMO. In any case, we should find out pretty soon what the price structure will be.

La Prensa:

José González Pinilla
jagonzalez@prensa.com jagonzalez@prensa.com

  The draft law regulating the title, in coastal areas will be modified.  Deputy Finance Minister, Dulcidio Guard announced yesterday that presented to the Assembly a draft reform package, which had passed the first debate, which has been questioned by locals and investors.

Among the changes is the establishment of a date for conducting a public consultation in order to pass a table of prices for the purchase of land with possessory rights.

  The price table is the main concern of local people and investors, who yesterday attended a forum organized by the Ministry of Economy and Finance (MEF).

  This event was attended by investors and retirees of the United States, Canada and other countries, who defended their right to the land owner who bought in the form of possessory right in coastal areas.  "I want to know how much more I have to pay," she said.

 As the land have no title but possession rights, must be purchased at State, Publius said Cortes, director of the Cadastre of MEF.

  For foreign investors, most have bought land with possessory rights to the locals.

  Cortés explained that in order not to affect them, the MEF aims to recognize the purchase by foreigners as well as the years locals have lived on the site, so that prices are fair.

  During the forum, Vice Minister reiterated that seeks to stop the land grab.

  A report by the Directorate of Land Registry points out, for example, that in Bahia Honda in Veraguas, some 700 hectares with possessory rights were bought at bargain prices: a one cent per square meter.

Panama education ranked near the bottom in Latin America

Panama spends a great deal of its budget on health and education, but unfortunately it does not pay off. This was made acutely aware by a recent study by UNESCO. Panama ranked 8th out of 11 countries evaluated. Who is to blame? Certainly it is the qualifications of the educators as well as the acceptance of cheating as a way to get ahead in this society. Cuba's ranking at the top may make some point to that communist country as the way to a better future, but I believe it is  better to be stupid and free than smart and enslaved!

La Estralla

Most Panamanian students have serious shortcomings in math and Spanish, that's what threw the second Regional Comparative and Explanatory Study of the Quality of Education in Latin America (SERCE) report released yesterday by the Ministry of Education.

The evaluation was organized by UNESCO, was practiced at the national level to about 13.011 students in third and sixth grade during 2005 to 2007.

  Arturo Rivera, National Director of Educational Evaluation, explained that the shortcomings are more noticeable in mathematics where only 4% of students managed to get the maximum points, but another 8.5% did not reach the minimum required because they generally do not dominate the geometry and find it difficult to solve math problems with two variables.  In Spanish, the main obstacle is the understanding of reading, only 6% of students obtained the highest level of qualification, but 12% did not reach the minimum.

 Similarly in science, just get the 0.77, in some countries competed this specialty, but also left Panama favored. Rivera recommended increased experimentation in the classroom.
 Panama eleven countries reviewed was the eighth, leaving as one of the worst.

Cuba won the first place, followed by Costa Rica, Chile, Argentina, Colombia, El Salvador and Peru.  Only three countries scored below such as Panama, Guatemala, Nicaragua and Dominican Republic.

  There are good schools
. El Colegio Brader (particular) and Nicanor Villalaz school located in Los Santos were among the schools that got results. . His students took higher scores than the averages for Latin America.. The assessment also includes the views of teachers teaching which calls for greater support.

  Lucy Molinar, Education Minister said the results do not surprise anyone, since it is well known, but they are an opportunity to identify areas that need reinforcement.

  Some plans included is incorporated into the bid book to those texts used in schools whose performance in the test was satisfactory.

  In addition teachers will strengthen in the areas of Spanish, mathematics and science through summer courses.

  Rivera added that the study found that teachers who use the dictionary every day in classes that their students have achieved high returns and this feature is achieved within the Republic. In addition it was determined that teachers require to memorize definitions math, "math is practice not theory," Rivera countered.Another important variant is that there must be a school climate conducive to the normal development of learning.

"I'm so sad," said Aixa Rodriguez, president of the parents, who ask what can we do?

  Rodriguez hopes that teachers be trained so that raising the quality of education.

  He added that some teachers were excused because students did not know the system, that argument was not accepted as valid.

$1000 makes a $100,000 tax bill disappear

Such a deal! For those of us who live in Panama, stories such as these come as no surprise and most of the populace just accept it as the way things are.

From La Prensa

The lack of controls to access the database of the Department of Revenue (DGI) left a window open to alter the accounts that taxpayers have with the state.

  The CEO of Revenue, Luis Cucalón, said on arrival at the institution in July found a database vulnerable to the discretion of some officials to "downgrade accounts and alter them, possibly in exchange for money."  In the DGI had created a barter system, "Give me a thousand dollars and 100 thousand U.S. dollars delete you and no one notices.  The way to know who that was incurred in reviewing the motions of the 620 staff of the DGI by a certain date, and no time to do that, we must be realistic, "he said Cucalón.

"As no trace of the transaction, it is difficult to test this situation," he said.

 In this context, the DGI now justifies the direct recruitment of the Panamanian company Risco, SA, which will strengthen the security arrangements for a payment system of 54 thousand dollars.  According Cucalón no time to wait six months a bid.

  Under the previous administration bought two technology programs, a collection and control "FISCO massive", with a total value of half a million dollars, which were financed by the IDB.  But according Cucalón, these do not work.

  Indeed, currently working with the test program "FISCO massive".

  Gisela Alvarez de Porras, former head of the DGI, said the system has internal accounting controls to detect data manipulation.

  However, Cucalón said there is no real audit method for calculating what they could have been stopped charging $ 200 million in recent years, according to the experience of analysts.

According to Porras, is foolhardy "to refer to such a large sum and make it as true."  "I assume that the DGI has no management information at this time".

Deposits in Panama banks grow 25% to $15 billion

There are several factors working in favor of Panama banks attracting such a significant increase in capital. Much of it is  probably a pull out of investments and into cash as the economy continues to worsen. Also Panama has still not signed on to information exchange with the OECD and Panama banks are a lot safer for peoples of Latin countries with leftist rulers.

1285975 EDITH CASTILLO DUARTE EDITH CASTILLO 1285975 DUARTE
ecastillo@prensa.com ecastillo@prensa.com

 Even in crisis, Panama is an attractive place for foreigners.  Abstractions or private foreign deposits recorded a balance of 14 thousand 996 million dollars by the end of August this year, an increase of 25% compared to the same period of 2008.

  This substantial increase, but surprised analysts, according to bankers is the sign that confidence is returning and that markets have stabilized.

  Panama also is benefiting from being the only country in the region which retains its growing economy.  70% of these deposits comes from Latin America, especially Venezuela and Ecuador, two countries with greater instability in the continent.  Financial integration of the system allows greater access to external funds.

Over 17,000 new business registered in Panama this year, but....

Considering the population of the country this seems like a large number of new businesses and it indicates a strong entrepreneurial spirit among the inhabitants. It includes every type of business from the small kiosk to the large conglomerates. As the article points out, the number of new businesses registered is greater, but their capital investment is 50% lower than in 2008, reflecting a slowing  economy. The portal for registering companies is seen as a major advantage in the registering of the companies, but the ministry of commerce says that it has canceled over 4000 permits due to lack of payment or false data provided during registration. I sounds like some folks in Panama are using the registry portal as they did the 911 emergency number just to agitate the state.

La Prensa

Ettrick light
lettrick@prensa.com lettrick@prensa.com

  Through the electronic portal PanamaEmprende this year there have been created 17 thousand 696 new companies with investment plans that reach a one billion 235 million dollars.

Panama is the province that is leading the charge in relation to the creation of new enterprises.  It is followed further back Chiriqui and Colon.

  The operating permits processed during the first nine months of 2009 are higher than those recorded last year, but the amount of reported investment fell 49%.

  Perhaps this answers the precautionary climate that prevailed in making business decisions during the past year due to the global crisis.

For William Gonzalez, director general of Internal Trade, Ministry of Commerce and Industry (Mici), an agency that administers PanamaEmprende, the drop in investment was declared last year as it processed the entry of larger companies with greater capital.

Gonzalez says the tourism sector is one of the most dynamic features. Several companies offer the service of tourist guides and tour operators have requested notice of operation to meet demand that is generated in the market.

  Some industries also have new members. "This shows that certain businesses are relocating," said first deputy chairman of Union of Industrialists, Ricardo Sotelo.

The employer believes the new industrial development bill currently being discussed in the National Assembly will help this sector to create new businesses and jobs.

 Cancellation

  While generating new business, Mici has also canceled operating permits.

  To date, the institution has canceled  4,335 operations for various reasons.  Among the most frequent violations is the registration of false information in the system.

 Cancellations are also related to clarification of the data, because sometimes there exist in the system business registrations which never began operations.

Understanding the new Panama property taxes

The new Panama tax laws #49 were implemented in September and I have been waiting for someone with a good understanding of Panama Tax law to give me a write up in English. The law firm of ICAZA,  Gonzalez-Ruiz & Aleman have done a great job of doing it. I have used this law firm for about 10 years and very reputable and capable.

The bottom line is that the government is moving to tax all property in the country and although there have been tax exemptions for improvements on the land (homes and other construction) as an incentive to build and buy, the land itself is not exempt and will be subject to a rather high mil rate by comparison to other countries, both in the first and third worlds. Although the income tax rate on the sale of properties has been clarified and lowered it still is significant when coupled with the 2% transfer tax at the public registry. Like countries everywhere in the world Panama has determined that property taxes are the easiest and most efficient way of generating revenue for the state.

Personally I abhor this kind of tax for two reasons. First of all, what happens if you don't pay the tax? Usually your property can be sold by the state to pay it. Although I have not seen this in the Panama tax code yet, if it can happen then you really don't own the property and are in essence just leasing from the state. Don't pay the rent and you get thrown out! Secondly it becomes very easy for the government to increase the mil rate as they find they need more revenue which is ALWAYS the case. In other words, once the camel's nose is under the tent, he will soon be sleeping with you.

This is a PDF file of 6 short easy to understand pages.

Download Taxadjustments

Steve Wynn on the U.S. economy

This video was sent to me by Sam K. and it is so good I wanted to share it with everyone. Steve Wynn is not happy with the way the current administration in the U.S. is doing things, but instead of just complaining about it, he has some good ideas on how to improve the situation. The beginning is more of an advertisement on his Vegas properties, but in a few minutes it gets into the meat of his ideas. Well worth the time to view.

Panama continues to attract lenders

It seems Panama does not have a problem in borrowing capital these days. I only hope that she has the ability to pay it back without saddling its inhabitants with a heavy tax burden. If that can be avoided it will be a first in the history of world governance. As the article points out, Panama external debt currently stands at over $11 billion. With an annual budget approved this month of about $11 billion and a GDP of about $20 billion, Panama has an extremely high debt ratio before additional borrowings. 

Machine translated from La Estrallia

MANUEL LUNA G.
mluna@laestrella.com.pa mluna@laestrella.com.pa

  The Panamanian government will use the funds for investment and social projects

  PANAMA. The government of President Ricardo Martinelli may benefit during the next five years of a credit line of one billion dollars with the Andean Development Corporation (CAF).
 The agreement was approved yesterday by the National Economic Council (CENA) and must be ratified by the Cabinet Council.
 The MEF's budget director, Omar Castillo, said the proceeds will be used for investment programs and social projects, but added that "this does not mean they will use everything in this moment."
CAF already disbursed $ 54 million was allocated to the Secretariat of the metro.

Castillo said the financial institution is interested in funding regional mega projects listed on the agenda of the current administration.  In July last year, Panama became a full member of this body, which is headquartered in Caracas, Venezuela, and is composed of 17 countries in Latin America, the Caribbean and Europe.

Panama's foreign debt last September to amounted to 11,079.84 billion, of which $ 442 million owed to CAF. At yesterday's meeting, also attended by Ministers of social area, who presented a report on grant programs and agreed to conduct a review to determine whether justified or not to continue with them.

Also approved a credit of $ 2 million for Senacyt to meet commitments to scholarship, authorized the National Bank to acquire General Bank branch in Brisas del Golf and terminated the contract with the homebuilders Euro, which would make the extension work National Assembly for $ 2.6 million.