Panama is reviewing its tax strategy in light of the challenges posed by a global fiscal consensus

More than 300 experts are attending the Second International Tax Congress in Panama.

Multilateral cooperation, the analysis of fair international rules, and greater administrative modernization are among the challenges and priorities Panama must address in light of the challenges posed by digitalization and geopolitics to tax systems.

The Central American nation aims to play a leading role in international debates on adapting tax regulations in an increasingly complex globalized environment, with a view to maintaining its status of transparency to attract investment.

“Multilateral cooperation is no longer an option; it is a necessity. In this scenario, tax systems—and by extension, our diplomacy—face unprecedented challenges, but they also have historic opportunities to redefine their role in generating well-being, competitiveness, and fiscal integrity,” said Foreign Minister Javier Martínez-Acha.

The foreign minister, who spoke at the opening of the Second International Taxation Congress—held today and tomorrow in Panama City and organized by the International Fiscal Association (IFA, Panama Chapter)—noted that Latin America and the Caribbean face structural limitations in their tax collection capacity, with average tax burdens below 25% of GDP and high levels of tax evasion, which is why he argued that the country proposes a vision of regional tax cooperation that combines efficient information exchange, technical assistance, and the progressive harmonization of standards.

“The debate on international taxation is not limited to technical matters; it is also a process of economic and reputational planning. Panama has nothing to hide and is based on clear rules,” assured Minister Martínez-Acha.

At the same time, he emphasized that adopting international standards does not in any way mean relinquishing sovereignty, but rather is a form of integration in technical and regulatory areas that enhances the country’s reputation within the region.

Review of New Measures

At the meeting, the president of IFA Panama, José Luis Galíndez, told Capital Financiero that Latin America is at a decisive moment for the modernization of its tax systems, in which new business models are driving the adoption of regulations to ensure competitiveness and fiscal sustainability.

In this regard, he noted that the implementation of the Qualified Minimum Tax (QMT) under Pillar II of the Organization for Economic Cooperation and Development (OECD) would help reduce pressure on jurisdictions to reform or reduce national tax incentives.

“This tax mechanism would be an interesting option for Latin America, particularly Panama, to ensure that multinational groups with revenues exceeding 750 million euros pay a minimum effective tax rate, regardless of the country where they operate,” he noted.

He argued that it would be a global solution, though he clarified that each nation retains sovereignty over its tax system; “if Panama does not apply a qualified minimum tax, the difference could be taxed in the jurisdiction where the company’s parent company is based.”

“Countries in the region are awaiting the upcoming G7 review, in which the Minimum Tax will be an option for the region,” emphasized the president of IFA Panama.

At the same time, he mentioned that Panama took a proactive stance to join the OECD, as the organization addresses multiple aspects that would allow the country to establish itself as a financial hub in Latin America.

The Role of Tax Administrations in Latin America

In the 1970s and 1980s, most Latin American countries had weak tax structures, with limited technology, low levels of professionalization, and very little enforcement capacity—a landscape that is undergoing change in the face of digital growth.

In light of this change, Raúl Zambrano, Director of Technical Assistance and Innovation at the Inter-American Center of Tax Administrations (CIAT), told Capital Financiero that the evolution of tax administrations in the region reflects a profound transformation process, enabling the closing of gaps and the strengthening of tax functions.

He noted that the organization, which brings together 42 tax administrations from the Americas, Europe, Africa, and India, has supported these transformation processes through technical assistance, the exchange of best practices, and support for technological implementation.

He emphasized that the organization’s work focuses on tax administration and enforcement, while fiscal policy decisions remain under the sovereignty of each country.

“Latin America is a pioneer in electronic invoicing, a system initiated by Chile in 2013 and which has now been adopted by most countries in the region, including Panama. This advancement has improved traceability, reduced tax evasion, and modernized the relationship between the government and taxpayers,” he added.

Referring to Panama, he stated that the country has accelerated the digitization of its procedures through electronic filings, online services, and automatic document validation; while acknowledging that there are still areas requiring improvement—such as response times and the standardization of processes—he emphasized that the overall direction is positive and aligned with global modernization standards.

“Modernization does not depend solely on governments; businesses and taxpayers must prepare to meet new requirements, adapt to digitization, and strengthen their tax culture,” he said.

The event brings together more than 300 experts from international firms, universities, multilateral organizations, and specialized consulting firms, as well as a YIN Technical Panel focused on the tax residency of legal entities.

The event addresses topics related to qualified and non-qualified intermediaries in Latin America, global wealth planning, CRS and FATCA information exchange, and new capabilities for tax administrations. Supervision of digital platforms, crypto, and international planning, as well as tax policy and investment: Creating predictable cross-border environments

On Wednesday, the final session of the Second International Taxation Congress will continue, featuring representatives from the Inter-American Development Bank (IDB), among other speakers.