Odebrecht tax breaks under scrutiny

ON THE DAY that work started on Metro Line 2 by a consortium led by scandal ridden Brazilian construction giant Odebrecht, tax breaks being offered to the company are coming under scrutiny.

The tax breaks, approved under the Ricardo Martinelli government, allow exemptions for the import of material and equipment for projects within Casco Viejo and downtown Colón. But Ramón Ricardo Arias president of the Panamanian chapter of Transparency International said the law was aimed at private investors, and not those receiving government contracts.

The government awarded the contract for the renewal of Colón to a consortium consisting of the Panamanian firm CUSA and the Norberto Odebrecht bringing contracts awarded to Odebrecht to over $8 billion and counting.

Odebrecht also benefitted from the law, which Arias says was passed with little consultation, when it was awarded projects in Casco Viejo.

The law was aimed at spurring private development in historic areas by offering significant tax incentives. In addition to the exemption from import duties, the companies are also exempt from municipal taxes and other fees