The construction industry in Panama could be affected due to the imposition of a new tax for the sector of non-metallic mining, which will fund a portion of the money needed to increase to payment for retirees.

Gogetit Highlights

* The Bill 197, currently under discussion in the National Assembly, establishes a new fee of U.S.$ 5 per extraction of a cubic meter of sand, stone and other construction materials, so that the state can get U.S. $ 22 million.

* This U.S.$ 22 million will compel the sum of U.S. $ 70 million, which is the amount of money needed to increase to pay to retirees.

* The significant increase in construction occurs because the new tax initiative fivefold, since before it was U.S.$ 0.53 and will now be U.S.$ 5, directly impacting to Panamanians.

The construction sector is experiencing a not very favorable situation because, in order to get enough money to retirees in the country, will begin implementing a tax on non-metallic mining industry, affecting the prices of construction and therefore housing.

According to information published by Revista Summa, guilds that bring together leading developers of housing, ensure that this initiative, home values ​​increase by 25%, although the Minister of Finance, Dulcidio De La Guardia, said the increase for U.S.$ 51 000 houses would be 1%.

There is a bill project, the 197, which took second discussion and debate in the National Assembly, which establishes a new rate of U.S.$ 5 for extracting a cubic meter of sand, stone and other construction materials, with so that the state can get U.S. $ 22 million.

If this project were to be approved, the impact on the real estate sector would be considerable. José Batista, advisor to the board of the Panamanian Society of Engineers and Architects (SPIA), states that the houses of preferential interest currently cost U.S.$ 40,000, used to cost about U.S.$ 25,000.

It is important to note that one of the main reasons for the increase in the cost of housing is on the rise in the price of construction materials is given. That is why the president of the Mining Chamber of Panama (Camipa), Roberto Cuevas, warned that this new tax will increase the cost of construction materials up to 20% and housing prices up to 25%.

The significant increase occurs because the new tax initiative fivefold, since before it was U.S.$ 0.53 and now will be U.S.$ 5, directly impacts the Panamanian. This was highlighted by Katherine Shahani, president of the Panamanian Association of Brokers and Real Estate (Acobir).

Read more information here (Article in Spanish).

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Silvia Merida Pellicer
Gogetit Content Manager. Author of important reviews for Gogetit News, “The #1 Source for real estate news in Panama.”
Specialized in the search and analysis of the most important news about real estate in Panama.