The Premium Insurance Tax in Panama is more than just a fiscal obligation:
The Premium Insurance Tax in Panama is more than just a fiscal obligation: it has become a key instrument for securing state revenue, regulating the insurance sector, and at the same time promoting access to protection services for the population.
In general terms, gross insurance premiums on risks assumed in Panama are subject to a 2%tax rate, while fire insurance policies and their renewals are taxed at 7%. There is also a 5% tax on certain gross premiums, though with specific exemptions such as life insurance with cash value, fire policies, and agricultural insurance.
The Fiscal Code not only establishes these rates but also sets formal obligations for insurers, such as the filing of an annual sworn statement and compliance with differentiated payment deadlines depending on the type of insurance. These mechanisms reinforce transparency in tax collection and ensure greater oversight of sector activity.
The differentiated structure of the tax—with variable rates and strategic exemptions—reflects a balanced approach: it ensures that essential insurance products remain accessible, encourages policy uptake, and contributes to strengthening Panama’s insurance culture, while at the same time securing sustainable revenue for the State.
Ultimately, the Premium Insurance Tax fulfills a triple role—revenue generation, regulation, and economic development—which makes it an interesting model in the region. Its design demonstrates how a well-structured tax policy can support both sector supervision and broader goals of economic growth and financial inclusion.
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