Lawyers reject criminalizing tax evasion

THE POSSIBILITY that the government might yield to “external pressures and make tax evasion in Panama a criminal offence has  been denounced by the National Bar Association (CNA).

“I t does not cause such a disturbance” that obliges the State to make it a criminal offense, said the body’s president Juan Carlos Araúz, who   on Saturday rejected the “external pressures,” to  take that step.

“Internal tax evasion is not part of a problem that requires a regulation in terms of its criminalization,” which “leads us to categorically reject any external claim” in that regard, Araúz said in statements to the Efe  news agency

Panama’s  Finance Minister Dulcidio De la Guardia said last week that international agencies have recommended Panama consider tax evasion as a criminal offense and not an administrative default, as it is now, and said  the issue should at some point be evaluated and debated.

Presidency Minister, Alvaro Alemán, has not ruled out that the recommendation on the criminalization of tax evasion should be included in a report that will be presented in 45 days by the Latin American Financial Action Task Force (Gafilat), which ended Friday an evaluation round in the country on Friday May 26.

For Araúz, external pressures on the fiscal issue are not in line with Panamanian reality and only yield to the pretension that the country should become “the fiscal police or the police of the taxes of any individual in another jurisdiction.”

In terms of taxes, the Central American country “maintains the possibilities of control and monitoring that determine precisely the fulfillment of the obligations of both nationals and foreigners residing in our territory,” said Araúz.

He added that Panama also has “sufficient control mechanisms” to prevent its powerful international financial center “from being used for the commission of criminal acts in the light of precisely what conduct is a crime in our country.”

Revelations in the Panama Papers of the creation by law firm Mossack Fonseca, of hundreds of thousands of offshore companies to enable businessmen, politicians and sports and entertainment figures to avoid taxes, reverberated around the world.