Panama First-Half Tax Revenue Rises 4.3% but Misses Budget Forecast

Panama’s tax revenue increased 4.3 percent in the first half of 2026, reaching 3,454.3 million balboas. Despite this year-on-year growth, collections fell 552.7 million balboas short of the government’s budget forecast, representing a 13.8 percent miss. The balboa is pegged one-to-one with the US dollar, making these figures directly comparable to greenback denominations.

The Dirección General de Ingresos reported that cash collections accounted for 3,391.3 million balboas of the total. The remaining 63.0 million balboas came from fiscal documents, which are tax credit certificates used by taxpayers to settle liabilities instead of cash.

Growth was primarily driven by the value-added tax on sales and imports, known as ITBMS, alongside property tax and wage income tax. The tax agency did not publish exact figures for these individual categories in its preliminary August release.

The tax shortfall is part of a broader revenue gap for the central government. Total current revenue, which includes non-tax items such as fees, dividends, and Panama Canal contributions, reached 4,203.1 million balboas. This left a wider deficit of 627.9 million balboas, or 13 percent, against the budgeted 4,830.9 million balboas.

Nevertheless, the broader fiscal picture shows improvement. The Non-Financial Public Sector, encompassing the central government, decentralized agencies, and state companies, saw total revenue climb 8.5 percent to 7,328.2 million balboas.

Consequently, the accumulated public sector deficit narrowed to 1,881.2 million balboas, equivalent to 1.98 percent of gross domestic product. This marks an 11.2 percent reduction compared to the same period last year. The central government deficit also contracted, falling to 2,683.2 million balboas in June 2026 from 3,081.2 million balboas a year earlier.

For investors and credit analysts, this narrowing deficit signals underlying macroeconomic resilience despite missed top-line targets. However, the persistent gap between projected and actual collections raises questions about the reliability of government fiscal planning.

External pressure compounds this issue. The Organisation for Economic Co-operation and Development has previously flagged Panama’s low tax take, which local observers link to negative current savings as of mid-2026.

The Ministry of Economy and Finance notes these first-half figures remain preliminary and subject to revision. While the year-on-year growth trajectory remains positive, closing the structural gap between budget expectations and actual revenue will be critical for Panama’s fiscal credibility.