Panama City, Apr 29: Panama needs "a little more time" to comply with OECD standards on exchanging tax information but remains committed to greater financial transparency, President Juan Carlos Varela has said.
Varela did not specify how much time Panama was seeking to meet the Organisation for Economic Cooperation and Development's reporting standards for automatically exchanging tax information. Revelations in the so-called Panama Papers, which showed how one Panama law firm set up 200,000 offshore entities for wealthy clients around the globe, have thrown Panama's secretive financial sector under intense international scrutiny.
OECD officials say they have long tried to get Panama to agree to their common reporting standards on exchanging tax information, to no avail. Panama insisted on bilateral accords on the matter, rather than the OECD's multilateral one.
But last week, during a visit to Japan, Varela told Kyodo News in an interview that his country had "decided to join" the OECD's reporting standards. His officials were to meet with an OECD technical team "to find ways to come to an agreement," he said.
No progress on the issue has been announced, and Varela's comments yesterday suggested more discussions were needed. In the meantime, Panama has been put on France's blacklist of "tax havens." Paris is also pushing EU and OECD partners to follow suit.
Varela, though, told the reporters on yesterday that he had spoken with German Chancellor Angela Merkel and she had "offered her support to Panama" as it pursues reforms of its financial sector. The Panamanian leader said he would make a state visit to Germany in October to sign a bilateral agreement on exchanging tax information "based on the OECD standards."