In 2025, the San Miguelito Mayor’s Office will have a New Tax Regime Looking to Collect $20 Million

The mayor of the San Miguelito district, Irma Hernández, announced that, starting in 2025, the new Municipal Tax Regime approved in Municipal Agreement No. 124 of December 3, 2024 and made official in Official Gazette No. 30172-A will come into force.  This new regime seeks to double municipal revenues, projecting a collection of more than $20 million annually by 2025. Currently, the district has managed to collect $12 million until November, with expectations of closing the year at $13 million, although this figure is insufficient to meet the needs of the municipality.  At a press conference, Hernández stressed that this reform is designed to return constitutional autonomy to the municipality, promoting its economic sustainability.

Until now, the tax regime was governed by Municipal Agreement No. 19 of November 18, 1985, which no longer responds to the current needs of the district.  The mayor reported that the new system will allow more than 30,000 companies to be registered in the Panama Emprende system of the Ministry of Commerce and Industry (MICI), in contrast to the 13,000 taxpayers who currently pay taxes.  “Now with this new system we are opening up the possibility of generating municipal collections from those more than 30,000 taxpayers who are not currently benefiting the Municipality of San Miguelito,” she said.  Hernández clarified that the lack of prior collection is not due to tax evasion, but to the lack of adequate tools and links on the part of the municipality. She stressed that the new system guarantees the resources to carry out effective monitoring.

Among the benefits included in the regime are:

• Early payment discounts: 15% in January, 10% in February and 5% in March for taxpayers who pay the full annual fee.
• Tax exemptions: Companies with annual revenues of less than $140,000 will be exempt from paying for advertising and signage.
• Incentives for new businesses and vehicle registration: Tax benefits for companies and fleets that register in San Miguelito.

The new regime also proposes an equitable distribution of tax contributions. Taxes will be calculated based on each company’s income.  For example, a company with an annual income of $100,000 will pay $25 per month in Economic Activity Tax, applying a formula of 0.25 cents for every $1,000 generated.  Hernández stressed that this is not a tax increase, but rather a transformation in the collection methodology. “Now, collection will be carried out through a calculation based on the income statements of each taxpayer, promoting fiscal justice and equity,” she explained.  Finally, the mayor stressed that this new regime will eliminate discretionary practices in collections by municipal authorities, establishing clear rules to prevent acts of corruption and guarantee transparent management of resources.