Cabinet authorizes Minister of Economy to propose law amending article of Panama Savings Fund - Expat Community

Cabinet authorizes Minister of Economy to propose law amending article of Panama Savings Fund

Apr 1, 2024 | News & Articles, Panama | 0 comments

By TVN Noticias

The Cabinet authorized the Minister of Economy and Finance, Héctor Alexander, to propose, before the National Assembly, the bill, “Amending Article 3 of Law 38 of 2012, which creates the Panama Savings Fund and establishes other provisions.”

In the Official Gazette of this Monday, April 1, Cabinet Resolution No. 33 of March 27, 2024 was published, authorizing the presentation of the project to modify the Panama Savings Fund.

The document does not specify the modification that would be made to Article 3 of the Panama Savings Fund Law.

Article 3 discusses the “Accumulation Rules” and is part of Chapter 2 of the Law dealing with the Resources of the Panama Savings Fund.

Article 3 of the Panama Savings Fund Law states that:

The Panama Savings Fund shall be constituted by the total assets of the Development Trust Fund, and assets shall be accumulated with the following contributions:

-50% of any contribution from the Panama Canal Authority to the National Treasury exceeding 2.5% of nominal GDP for fiscal years 2018 and 2019, and 2.25% from fiscal year 2020 onwards. This surplus shall be transferred in the next fiscal year following the publication of GDP by the General Comptroller of the Republic.
-The remaining 50% shall reduce the financing needs of the General National Budget.
-Returns from the Panama Savings Fund from fiscal year 2018, which shall be capitalized in the Panama Savings Fund during the following fiscal year, until the net worth of the Panama Savings Fund exceeds 5% of the previous year’s nominal Gross Domestic Product.
-Funds from the sale of shares in state-owned mixed companies.
-Inheritances, legacies, and donations made to it.
-Resources designated by law to the Panama Savings Fund.
-Transitory paragraph. Until the Board of Directors and the Technical Secretariat of the Panama Savings Fund are established, the liquidation of the assets of the Development Trust Fund for transfer to the Panama Savings Fund shall be the responsibility of the Trustor and the Trustee.

Currently, the National Government has a debt of $1,312 million with the Panama Savings Fund.

Reference

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