The creation of the National Public Revenue Authority was created by means of Law No.24 of 8th April 2013, published in Official Gazette 27262-B of Tuesday, 9th April. This law repeals Cabinet Decree No.109 of 7th May 1970, which created the General Revenue Administration (DGI, its initials in Spanish) and assumes the functions of the now defunct DGI but with its own autonomy. We shall review this new authority in detail.
The Ministry of Economy and Finance was created by means of Law 97 of December 1998. This ministry was charged with the administration of most of the domestic taxes, particularly those in the Finance portfolio, which was at first divided into three offices: the General Customs Administration, the General Cadastre Administration and the General Revenue Administration.
In 2008, the General Customs Administration became an autonomous institution with oversight by the Ministry of Economy and Finance that is currently known as the National Customs Administration (ANA, its initials in Spanish). Subsequently, the same change was carried out in 2010 at the General Cadastre Administration, which became an autonomous institution known as the National Land Administration Authority (ANATI, its initials in Spanish). Two years later, the General Revenue Authority was decentralized with the creation of the National Public Revenue Authority (ANIP, its initials in Spanish).
The main purpose of creating this new institution is to improve the public resource collection system and to reinforce administrative procedures. Among the functions of this new institution are the acknowledgment, collection, payment, recovery, investigation and oversight of taxes. It replaces the current General Revenue Authority (DGI, its initials in Spanish), which held such powers.
ANIP will in addition be charged with applying penalties, collecting through legal action, issuing motion resolutions and issuing any administrative documents required in the event of any breach of fiscal laws, as well as any other activity relating to the fulfillment of the obligations set out by regulations with regard to taxes, charges, levies and internal income included within the active administration of the National Treasury that are not assigned by law to other State institutions as stipulated by Cabinet Decree 109 of 1970, among another series of internal functions that have yet to be regulated.
Three important aspects of this new Authority. First, as to the fulfillment of obligations concerning taxes and charges, as for example the reimbursement of taxes, additional tax payments, the fixing of fines and penalties; actions when these are contested are monitored by the Tax Administrative Court (Law 8 of 2010).
If the taxpayer feels that his rights have not been duly acknowledged by the Tax Administrative Court, it shall be considered that he has exhausted all administrative remedies and may turn to the Third Administrative Court in order that a judicial review of ANIP’s administrative act may be carried out through a Full Jurisdiction Contentious Action.
Second, appeals against third parties, exceptions and incidents that are brought due to ANIP’s legal action collection procedure shall also be heard by the Tax Administration Court as set forth in Law 8 of 2010. In this regard, the Third Court of the Supreme Court of Justice shall not hear this sort of appeals, as set out in Section 4 of Article 97 of the Judicial Code, which does apply for other legal action jurisdictions.
Lastly, ANIP has inherited the function of enforcing tax information exchange treaties. Section 6 of Article 20 of Law 24 of 2013 provides that one of the administrative offices of the Authority is the International Tax Authority, which shall be in charge of interpreting the tax treaties or conventions signed by the Republic of Panama. It shall likewise have the responsibility of drafting requests for the exchange of any information that the Republic of Panama may require from foreign tax authorities, as well as that of processing and replying to requests for any information exchange that foreign tax administrations may require from the National Public Revenue Administration.
In due course, Law 33 of 30th June 2010 granted this power to the defunct DIG, indicating that the General Revenue Administration was authorized and empowered to request and gather information with the sole and exclusive purpose of enforcing the international conventions signed by the Republic of Panama on the exchange of tax information, even where there is no relation to any domestic tax interest.
Panama is not the first country to convert its tax collection institution into an autonomous institution, which in our case is overseen by the Tax Administrative Court and the Supreme Court of Justice. We trust that, with this independence, the essential aims of the former DGI may be achieved and that this new Administration may distance itself from all political influence.