Panama is in the middle of the pack when it comes to the tax burden as a percentage of the country's GDP. According to this article in La Prensa, Panama believes it should be closer to the top range of countries in the region. Panama is currently at 16.6% of GDP while, according to study done by the firm of Rivera, Bolívar & Castaneda on the tax burden in Latin America and the Caribbean relative to GDP, Venezuela (17 percent), Bolivia (20 percent), Chile (21 percent) and Costa Rica (22.5 percent) are all higher than Panama.
If attracting foreign direct investment is as important as the administration says, the tax burden should be considered very carefully. Nothing scares away investment as much as high taxes. To the investor, it is tax burden directly on the company that is more important than as a percentage of GDP. GDP does not reflect the profit of the businesses in the country, only the overall production.
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