The government is exploring new ways to increase tax revenue and at the same time helping to provide relief from rapidly increasing fuel costs here in Panama.  Prensa.com reports that Authorities are considering lowering or eliminating the tax on fuel and replacing it with one for “luxury goods”.

When explaining what would be considered a “luxury good”, president Ricardo Martinelli referred to cable television and tv commercials.

Conep, the private enterprise council, believes that the proposed strategy must be analyzed, because ‘it is not wise to solve a problem by creating another’.

Panama currently earns $0.6 for each gallon of gas and $0.25 for each gallon of diesel fuel.

Horacio Estribí, an economist described that it is  a positive initiative to be exploring these issues, but argues that instead of passing the increase of other taxes, the government must reduce other budget expenditures that are not priorities, such as the construction of the new financial tower and other things. “It is unwise to raise taxes, because it would bring a greater degree of inflation,” he said.