Current income has recorded a deficit of $309 million since March

Management of Laurentino Cortizo It continues to maneuver with severe weakness in its public finances, which has affected the payment of obligations to the Government and its contractors or suppliers.

Current income from state, in the first quarter of this year, amounted to 1.416 million dollars. But this was not enough to cover the budget costs, which kept public finances in a very weak state and increased dependence on additional borrowing.

This total revenue in the first quarter of the year represents a shortfall of $309.5 million, compared to what was planned for this date, according to the preliminary report Ministry of Economy and Finance.

Even the revenues for this first quarter represent a worse situation than the one recorded last year, when current revenue was $305 million above, or $1,721.4 million.

Tax revenues representing 83% of the total current revenues of the state had improving on March by collecting $682 million, 1.9% more than what was planned for the month.

But it was not enough to cover the deficit, since it is in the accumulated until the first quarter tax revenues remain in the red, recording $1.172 billion collected, a figure that is 14.2% below budget needs. That is 193.7 million dollars.

Of this total amount of taxes accumulated up to March, direct taxes (income, property, notices of work and education insurance) collected $684 million, which is $87 million below what was planned in the budget. In addition to indirect taxes (ITBMS for traffic and imports, imports, fuel consumption, excise duties, etc.), 488 million dollars were collected, 17.9% below the budget.‘

4%

above was the budget deficit in 2022, as explained by economist Olmedo Estrada.

Non-tax revenues also remain in the red, and the outlook is worse. According to official data, non-tax revenues recorded an accumulated collection in the first quarter of $216.7 million, 35.4% below budget needs. That is, a deficit of 118.9 million dollars.

For Olmedo Estrada, former president of the College of Economists of Panamaá, at this moment the revenue pattern shows a decrease compared to what was planned.

“Companies and people who have to pay taxes are not coming to cover this obligation, due to some economic conditions that occur in each case, however, which tell us that if this pattern of behavior continues, we will reach the level of 2022, where the budget deficit was above 4%”said the expert.

He added that this is a situation that puts Panama that they have to go looking for debt in order to be able to cover the deficits that are created in the country’s finances.

“There is no behavior that tells us that in a situation like the one we are experiencing, it is possible to resort to what it means to reduce the operating costs of the state by containing costs, so certainly if this continues, what we will have at the end of the year is a budget deficit that will hit us debt issue”he commented.

Estrada confirmed that despite the fact that in 2022 the national production reached figure of $76 billion, there are still companies that have not been able to recover 100%.

Added to this, the expert expressed that there are still conditions that are evident such as corruption, mismanagement public finances, etc. which accumulates in behaviors that can lead to non-payment of taxes.

“The only way the government finds that it can balance the budget is by borrowing from the state, and as we know, the government still has a year left until the end of its mandate, and it will certainly not cut the budget, nor will it curb spending, and in the end, what it will do is look for financing”he asserted.

This is so that the next Government would see how it is looking for a way to solve these debts.He said.