Panama has announced plans to replace its e-Tax system with a new digital platform after uncovering a years-long tax fraud scheme within the General Directorate of Revenue, introducing end-to-end traceability and automated controls to strengthen transparency and prevent future abuse.
Panama’s Ministry of Economy and Finance (MEF) disclosed on 5 August 2026 that criminal fraud schemes operated within its General Directorate of Revenue (DGI) for years, systematically circumventing institutional controls. Minister Felipe Chapman confirmed that criminal prosecution will proceed against those responsible and that the government maintains zero tolerance, with no room for negotiation or settlements.
The scope and Chapman’s message
Chapman described what happened as unacceptable and acknowledged that a targeted group deliberately violated controls to defraud the State. He sharply distinguished between this criminal group and the broader DGI workforce, noting that the vast majority of employees perform honestly. Tax collection and administrative operations continue normally nationwide.
Manual processes created the vulnerability
The fraud exploited gaps in the old system where procedures remained manual and discretionary. These unautomated processes gave space for manipulation and left audit trails incomplete or alterable. Tax operations that should have been digitised decades ago instead remained dependent on human judgment and paper workflows.
Digital replacement and safeguards
To permanently address the loopholes that enabled fraud, the National Government will replace the e-Tax system with a state-of-the-art digital platform designed to ensure full traceability of every file and automate processes that were previously handled manually.
The modernisation plan includes the following key measures:
- Mandatory digital traceability: An immutable audit trail and real-time monitoring of every administrative procedure.
- Elimination of manual discretion: Digitisation of vulnerable processes to reduce opportunities for manipulation.
- Continuous auditing of public funds: Technological safeguards to ensure all revenue collected is directed towards national priorities, including social investment, employment, education, healthcare and public security.
Announcing the reforms, Chapman said the existing e-Tax system would be replaced with a more robust digital platform that records and tracks every transaction, while digitising processes currently performed manually to reduce fraud risks and strengthen financial oversight.
The Ministry of Economy and Finance reaffirmed its commitment to accountability, institutional transparency, and the use of legal and technological measures to safeguard public resources.
