No changes planned to tax evasion penalties

Although it is one of the recommendations of the Financial Action Group (Gafi), Panama will not alter its tax evasion laws to include possible prison sentences.

Currently, tax evasion is punishable by administrative sanctions.

In response to a decision by Gafi to place Panama on its grey list, the government has issued a list of proposed changes to fight money laundering and other financial crimes. But the criminalization of tax evasion was not on the list.

These measures are contained in an action plan agreed to in June by Panama and Gafi, an intergovernmental entity that sets standards and promotes the implementation of legal, regulatory and operational measures to combat money laundering.

Gafi made 40 recommendations to Panama. The organization will continue to monitor Panama's progress in meeting the standards of the organization.

The exclusion of Panama from the grey list depends on the implementation of the action, something that could happen this year.

The government has resisted making tax evasion a criminal offense because some officials fear that the Revenue Department could then be used against political opponents.