Davos 2018: ‘Unfair’ Panama was put on tax blacklist says president

[dropcap]I[/dropcap]ncluding Panama on the EU’s tax haven blacklist was “unfair”, the country’s president has said.

“I think Panama was erroneously included. It was a mistake,” president Juan Carlos Varela said on the sidelines of the World Economic Forum in Davos.

Earlier this month, European officials recommended that eight countries, including Panama, be moved from the EU’s tax haven blacklist to its grey list, after they promised to reform.

The move was described as “laughable” by Markus Ferber, German MEP and member of the European Parliament’s Economic and Monetary Affairs Committee, who added that coming so soon after the Panama Papers scandal, pardoning the central American country was “hard to beat in terms of naivety.”

But president Varela told the Financial Times that the initial inclusion on the blacklist was a result of a “miscommunication”. He added:

We don’t agree with including countries in a list. Treating friends like they did with us?.?.?.?put pressure on diplomatic relations. The Panama Papers was a global issue not a Panamanian issue. It was very unfair to put the name of Panama to a global problem
like tax evasion.

The country has stepped up efforts to fight corruption and is offering an amnesty to companies that have inappropriately avoided tax in the past, he said. “If they plead guilty and return the money they can close the chapter and move forward with their life.”

Mr Varela added that the decision to sever diplomatic ties with Taiwan last year was “the right thing to do”. As a result of the recognition of the One China policy, Panama is now working with a number of Chinese companies looking to use Panama as a regional hub, as well as using Chinese expertise for a rail project linking to Costa Rica.