{"id":13925,"date":"2026-06-11T11:48:00","date_gmt":"2026-06-11T16:48:00","guid":{"rendered":"https:\/\/expat-times.com\/panama\/?p=13925"},"modified":"2026-06-11T13:12:01","modified_gmt":"2026-06-11T18:12:01","slug":"panama-local-governments-receive-196-million-in-2027-decentralization-push","status":"publish","type":"post","link":"https:\/\/expat-times.com\/panama\/politics-government\/panama-local-governments-receive-196-million-in-2027-decentralization-push\/","title":{"rendered":"Panama Local Governments Receive 196 Million in 2027 Decentralization Push"},"content":{"rendered":"

Panama’s municipalities and local community boards will see a significant increase in decentralization funding next year. The National Decentralization Authority (AND) confirmed that 196 million dollars will be distributed from Property Tax (IBI) collections. Roxana M\u00e9ndez, the general director of AND, made the announcement after budget negotiations with the Ministry of Economy and Finance.<\/p>\n

The funds represent a major boost compared to recent allocations. M\u00e9ndez expressed satisfaction with the outcome. “We are super happy because the Ministry of Economy and Finance raised our budget ceiling,” she said. [Translated from Spanish]<\/p>\n

The director explained that the increase aligns with the government’s commitment to strengthen local governance through proper tax revenue distribution.<\/p>\n

\"municipal
municipal council<\/figcaption><\/figure>\n

Property Tax Revenue Transfer Increases After Years of Decline<\/h2>\n

The 2027 allocation comes after months of pressure from local officials. Nadine Gonz\u00e1lez, president of the Association of Municipalities of Panama (Amupa), confirmed that this achievement resulted from sustained advocacy. “It has been an effort by many actors,” Gonz\u00e1lez stated.[Translated from Spanish]<\/p>\n

She noted that before the pandemic, municipalities received around 200 million dollars annually. However, both the 2025 and 2026 budgets allocated only 83 million dollars each year.<\/p>\n

Tax collections remained high despite the reduced transfers. The 2024 collection reached 211.9 million dollars. The 2025 collection totaled 196.4 million dollars. “By law, the full amount collected must be transferred to us. That is not happening,” Gonz\u00e1lez said.[Translated from Spanish]<\/p>\n

The Property Tax (IBI) Panama<\/a> system requires that all revenue from this tax go directly to local governments.<\/p>\n

\"1612px
Mayer Mizrachi by Gage Skidmore, CC BY-SA 3.0, https:\/\/commons.wikimedia.org\/w\/index.php?curid=166435817<\/figcaption><\/figure>\n

Mayor Mayer Mizrachi<\/a> of Panama City publicly questioned the distribution weeks ago. “The government collects more than ever and distributes less than ever,” he said at the time [Translated from Spanish]<\/p>\n

His criticism highlighted the growing tension between local and national authorities over fiscal resources.<\/p>\n

Outstanding Debt Remains Despite Budget Increase<\/h2>\n

The 196 million dollar figure still leaves a significant gap. Gonz\u00e1lez recalled that in May, the National Assembly’s Budget Commission approved a 30 million dollar transfer to cover part of the accumulated debt. Those funds would add to the 83 million dollars in the current budget. That brings the total to 113 million dollars for 2026. Yet approximately 83 million dollars remain unpaid for this year alone.<\/p>\n

The money supports operations and investments for 81 municipalities and 701 local community boards. Gonz\u00e1lez confirmed that the Ministry of Economy and Finance manages the accounts. “The mayor manages the project, conducts the bidding process, and the MEF pays the contractor directly. The money remains in a single Treasury account,” she explained.<\/p>\n

Only 10 percent of each municipality’s IBI allocation can cover operating expenses. The rest must fund public works and projects. Smaller municipalities receive an exception allowing up to 25 percent for operations, including staff salaries. The Panama decentralization law<\/a> establishes these spending rules to ensure funds reach communities directly.<\/p>\n

Distribution Favors Larger Municipalities<\/h2>\n

Not all municipalities receive equal funding. The distribution formula gives more resources to districts that generate higher Property Tax revenue. Panama City leads this group, followed by Arraij\u00e1n, Col\u00f3n, San Miguelito, and David. Smaller municipalities with lower collection capacity receive a base allocation of 500,000 dollars. The National Decentralization Authority (AND) Panama<\/a> oversees this distribution process.<\/p>\n

Amupa, along with the National Coordinator of Corregimiento Representatives (Conare) and the Association of Mayors of Panama (Adalpa), have pledged continued action. Once the National Assembly resumes regular sessions in July, these groups will push for the remaining funds. They have stated they will not remain idle while local governments wait for their legally mandated resources.<\/p>\n

The current system differs sharply from the controversial Parallel Decentralization Program (PDIS). That program operated during the Laurentino Cortizo administration from 2019 to 2024. Its funds are now under investigation for alleged patrimonial damage involving dozens of individuals and local officials. IBI resources remain in accounts managed by the Ministry of Economy and Finance, with payments made directly to contractors after project approval.<\/p>\n","protected":false},"excerpt":{"rendered":"

Panama’s municipalities and local community boards will see a significant increase in decentralization funding next year. The National Decentralization Authority (AND) confirmed that 196 million dollars will be distributed from Property Tax (IBI) collections. Roxana M\u00e9ndez, the general director of AND, made the announcement after budget negotiations with the Ministry of Economy and Finance. The<\/p>\n","protected":false},"author":1,"featured_media":13926,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sitemap_exclude":false,"_sitemap_priority":"","_sitemap_frequency":"","footnotes":""},"categories":[29],"tags":[235,4756,4754,4755],"class_list":["post-13925","post","type-post","status-publish","format-standard","has-post-thumbnail","category-politics-government","tag-decentralization","tag-decentralization-funds-panama","tag-panama-local-governments-receive","tag-property-tax-ibi"],"_links":{"self":[{"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/posts\/13925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/comments?post=13925"}],"version-history":[{"count":2,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/posts\/13925\/revisions"}],"predecessor-version":[{"id":13957,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/posts\/13925\/revisions\/13957"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/media\/13926"}],"wp:attachment":[{"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/media?parent=13925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/categories?post=13925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/expat-times.com\/panama\/wp-json\/wp\/v2\/tags?post=13925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}