Union leader sees no sign of fiscal reform

THE ECONOMIC and political elite of Panama do not want to reform the tax and financial system because it is one of the main beneficiaries of millionaires from around the  world hiding money in “offshore” companies said Union leader, Saul Mendez on Saturday May 14.
“They are the reason  that many countries consider us a tax haven. The Panamanian elite has to wonder what it has   done to the country, helping  hide fortunes of  drug lords and corrupt leaders said Mendez” Secretary General of the powerful Construction  and Allied  Workers Union,(Suntracs).
The Panama Papers , considered one of the biggest  journalistic  leaks in history,  have revealed that hundreds of personalities from around the globe hired the services of Panamanian law firm Mossack Fonseca to manage assets and allegedly evade taxes

The firm, which has 40 offices in different countries  and employs more than 500 people, is considered the fourth  largest on the  planet creating  “offshore” companies.

“In Panama there is a state of legalized corruption that most Panamanians have nothing to do with. Ask yourself how many Panamanians, of the four million that   are able to have or create a company in a tax haven,” said Mendez in an interview with Mi Diario.

The Panamanian people, according to the union, are the only ones who will suffer the economic impact of this global scandal because the elite “will remain the same”.

The first direct consequence of the Panama Papers has been the inclusion of Panama in  the French list of tax havens, which it  left in 2011 after  signing a double taxation treaty and exchange of financial information.

“We believe that the state should reform this , but who is going to do it, the same that govern the country and have  partnerships offshore?”
A few days after the scandal broke , Panamanian President Juan Carlos Varela, announced the creation of a committee of experts to review the practices of the fiscal and financial system, led by the anti-globalization economist and Nobel Prize winner Joseph Stiglitz.

The measure, was widely questioned and criticized by Panamanian observers   because in the presidential cabinet there are several ministers who were engaged in asset management before entering politics.

“When will we talk in this country of distribution of wealth the situation is wild, we are the most unequal country in Latin America: 115 billionaires,  and over , 1,500millionaires  hiding money in tax havens”, said  the union leader .

The Canal recovery in 2000, was supposed to reduce social duality because the state would have more resources to be allocated to social policies.  “But it was all an illusion” said Mendez.

“The Canal is there, yes, but it has not changed the way of life of the average Panamanian. And enlargement (which will be inaugurated June 26) is on the same path,” said the trade unionist.