The Panama municipal was struggling over the amount to charge vehicle owners for their yearly vehicle tags. I thought Panamanians had it good with a set $26 fee no matter the value of the car. I remember foolishly buying a luxury vehicle in Argentina years ago and they hit me with a $5000 luxury tax fee each year. I did not keep it long! So Panama's $26 fee seemed like such a deal. Well, that will soon be changing as the law now allows for the tax to be based on the value of the vehicle instead of a set fee. There are those who believe this to be fair, but a higher priced vehicle uses no more road than a low priced one and the higher valued vehicle has already paid a higher sales tax and in some cases a luxury tax so this new graduated tax is just another innovative way to get more income to the state. But in typical fashion the law was not clear on used vehicles and depreciation and would have been implemented strictly based on the car value of that specific model when originally regestered and stay the same each year. Fortunately smarter heads prevailed and the tax will be based on a depreciated value which at least we all agree is some consolation. Here is an article from La Prensa with the details of the tax controversy.
Machine translated from La Prensa
Gricel Yaritza Mojica
[email protected]
The Mayor of Panama has made further adjustments to the vehicle road tax, which is paid out when getting the plate.
The MP and ad honorem advisor to the Mayor, Jose Isabel Blandon, admitted yesterday that there were many doubts and conflicts over taxes paid by owners of vehicles, from 1 March.
The new tax regime, which was approved in December 2010 by the City Council of Panama, meant that the tax would be determined by the value of the vehicle at the time of registration.
Following that announcement, critics were multiplied because vehicles worth more than $ 20,000 would pay $ 38 in tax, and $ 50,000 to $ 75 000 would pay $ 50 and $ 75 thousand to pay above $ 150. Cars less than $ 20,000 only pay $ 28. Previously the tax was $ 26 for all vehicles.
However, Blandon said that now the new tax will be paid according to the depreciation of the car.
The change came after the Automobile Dealers Association of Panama (ADAP) to request an extension of the entry into force of the new vehicle tax to the Treasury of the Municipality of Panama.
The ADAP submitted a proposal to the Municipality so that, through a table, the charge is levied according to the annual depreciation of the vehicle. The municipality reported that studies the proposal, which has not been disclosed.
According to Blandon, a new car will pay the tax the first year for the value that was purchased, but that same vehicle will lose value in the coming years, so you should pay less.
He said, for example, a Toyota Prado whose value is between $ 50,000 to $ 75,000, will pay first years $ 50, then the vehicle owner may pay $ 28 the following year.
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