Increase in gas tax rejected


A government proposal to increase the gas tax 5 cents per liter to fund an increase in pensions for retirees has been widely rejected.

The Independent Movement for Panama (Movin') said the tax increase will not provide a permanent solution to the problem, and will directly impact consumers, including retirees. It appealed to the government to address the issue in a sustainable manner by consulting experts in the field.

"This would open up spaces for dialogue, debate and consensus that will surely result in a permanent solution to a critical issue," it said.

The Chamber of Commerce has also rejected the initiative.

"This is a measure that doesn't solve the root problem," it said. "It is socially fair to increase pensions, since they have fulfilled their civic duty, but it needs to be done after detailed analysis."

Critics say the government made the proposal because of the recent drop in gas prices. If prices rise, consumers will be burdened with a tax they can no longer afford. 

Chamber President José Luis Ford said other methods, such as reducing subsidies, taxes on other activities or a decrease in state spending would have been a better solution.

"This is a serious problem that needs a genuine solution, and not a patch," he said.

In a poll on the website of La Prensa, 84.36 percent of voters rejected the proposal.

Minister of Economy and Finance Dulcidio De La Guardia said that this measure is expected to raise $100 million, of which $80 million will be used for pension increases.



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