Panama’s tax revenue increased by 15.2 percent through the first ten months of 2025 compared to the same period last year. Preliminary data from the nation’s revenue agency shows collections still fell short of the government’s annual budget target by a significant margin, highlighting ongoing fiscal challenges.
The Direct General Directorate of Revenue (Panama) reported cumulative tax income of $5.21 billion from January to October. This figure, while showing recovery, remained $1.16 billion below the budgeted goal for that timeframe. The revenue shortfall represents an 18.2 percent gap against projections.
Monthly Performance and Direct Tax Strength
October alone saw cash tax revenues of $460.3 million. That marked a 25.2 percent year-over-year increase. Even this stronger monthly performance, however, was 23.6 percent below the target set for October.
Direct taxes fueled the monthly growth, soaring 57.8 percent to $219 million. Indirect taxes saw a more modest 5.4 percent rise to $241.3 million. The trend held for the ten-month period where direct tax collection jumped 27.7 percent to reach $3 billion.
“We expect this tax to exceed $110 million in January 2026,” said DGI director Camilo Valdés. [Translated from Spanish]
Valdés referenced the ITBMS (Transfer Tax on Movable Property and Services), Panama’s value-added tax. He noted November collections reached $91.1 million with December expected to close near $93 million. The agency’s internal goal is a major jump next month.
Detailed Breakdown of Tax Sources
Payroll tax led the growth in direct taxes with a staggering 51.4 percent increase through October. Real estate tax surged 85.7 percent. The Corporate Income Tax on legal entities rose 9 percent.
Other notable performers included capital gains on securities, which exploded by 199.1 percent. Dividend tax revenue also grew by 22.4 percent. Indirect tax collection told a different story, rising just 1.8 percent to $2.21 billion cumulatively.
ITBMS collection from sales specifically reached $776.15 million over the ten months. That was 20.5 percent below budget and 3 percent lower than the same period in 2024. Officials are pinning hopes on a new incentive program to boost these numbers.
The Fiscal Lottery, launched in August, aims to encourage consumers to request official receipts. The strategy appears to be having a positive effect. October’s ITBMS revenue from sales was $92.2 million, a 26.8 percent increase from October 2024. It still missed that month’s target of $110.7 million. The next lottery draw is scheduled for December 30.
Total state current revenues, which include non-tax income and contributions from state companies, reached $6.46 billion through October. That was a 13.9 percent annual increase. The broader revenue picture also missed its mark, finishing $2.13 billion under budget.
Panama’s fiscal recovery continues on an upward but uneven path. The consistent gap between actual collections and budget projections underscores the complexity of the nation’s post-pandemic economic normalization. All eyes are now on the year-end figures and the promised January rebound in key tax streams.