Moving tax residence to Panama? The daring ‘offer’ of a former president to Colombian investors

The Panamanian president’s proposal provoked the immediate reaction of a senator from the Historical Pact.

The former president of Panama Ricardo Martinelli called on “good Colombian investors” to transfer their tax residence to the neighboring country, in the context of the tax reform agreed by the Colombian Congress last week, and which he expects to be sanctioned soon by the president Gustavo Petro.

The tax reform seeks to collect some 20 trillion pesos (about 4,118 million dollars) in 2023, which will be allocated to public spending against poverty and in educational, health and environmental matters.

Martinelli commented on a tweet published days ago by Senator Gustavo Bolivar, from the Historical Pact bench, where the parliamentarian reported that the bill will enter into force in January 2023.

“Panama is a place that opens its doors, hands and heart to all good Colombian investors who want to change their tax residence“, says the Panamanian businessman who was in the presidency between 2009 and 2014.

In his tweet, he asserted that the Central American country “welcomes with open arms” Colombians who move to Panama to “invest creating wealth and jobs with lower taxes and security.”

On the critical side

With this invitation, the former Panamanian president is on the same side of the project’s critics, who assert that the Law affects Colombian business and mineral exploitation companies, which, according to them, could scare off investors and threaten the employment generation.

Among the most questioned issues are the progressive rent surcharge in the energy-mining sector, based on the international price in the last ten years, and the temporary surcharge for financial and hydroelectric entities.

Another aspect that has caused discomfort in the business sector is the non-deductibility of royalties from the income paid by companies that exploit coal and oil.

In this regard, the Minister of Finance, Jose Antonio Ocampo, stated days ago that he hopes that in the next reform taxes will be lowered for businessmen, who currently must pay 35% of income taxes, reports Semana.

In Panama, according to La Republica, the income tax for companies is 25%, on the net income subject to being taxed.

Gustavo Bolivar’s response

Senator Bolivar reversed Martinelli. In another tweet, the parliamentarian asserted that the ‘Panama Papers’ proved that in that country “many Colombians launder dollars and evade taxes who complain about insecurity but it hurts them to contribute to social justice based on ‘total peace’.

The parliamentarian has maintained a critical position with some sectors of the business community in his country, which he accuses of invest “crumbs” in Colombia allocate the “thick” to accounts outside the country.

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