The Panamanian parliament approved a draft law on Tuesday that would enforce customs, fiscal, and migration measures against countries or international organisations that accuse Panama of being a tax haven, reports French news service AFP.
The draft law was unanimously approved by the national assembly.
Panamanian politician Adolfo Valderrama said that the law was a “retaliatory measure” against states, international organisations or anyone who damaged the reputation of Panama.
He added that implementing the law would be one of the most difficult decisions a government could make.
Tax information exchange
As Panama continues to try to extricate itself from the Panama Papers scandal, which saw 11.5 million documents stolen from Mossack Fonseca, the country’s government also tabled a bill on Tuesday that would set up a regulatory framework for the automatic exchange of tax information
The bill would apply to public and private companies, as well as financial institutions.
Under the proposed act, Panama’s Ministry of Economy and Finance (MEF) would be able to request information, as well as inspect, supervise and take enforcement action where necessary.
Financial institutions that fall under the scope of the bill would be required to set up policies, procedures and internal controls to ensure that they comply with their due diligence requirements.
The MEF would be able to levy fines of between PAB500 (£373, $500, €445) and PAB10,000 against private companies that fail to provide information within the allotted timeframe.
Financial institutions will face fines of between PAB5,000 and PAB50,000.
The bill, which is an amendment to Article 18 of Law 69, will be submitted to the national assembly for discussion and approval.
Despite Panama’s attempts to distance itself from its reputation as a tax haven and the fallout of the document leak dubbed “the biggest ever blow to the offshore world”, the scandal goes on.
It was reported Wednesday that Denmark has agreed to pay as much as DKK9m (£1m, $1.4m, €1.2m) to an anonymous source in exchange for data on around 600 Danish citizens.
One Danish official cited by The Guardian said that the cash hasn’t been paid yet. The amount to be paid hasn’t been released but it is understood to be a single digit million kroner sum.
Taxation minister Karsten Lauritzen said: “We owe it to all Danish taxpayers who faithfully pay their taxes.”
The move has been strongly criticised by Denmark’s Liberal Alliance party who have claimed that it might encourage the theft of private information to sell to the Danish authorities.