Editing Economy of Panama (section)

===Further reforms===
[[President of Panama|President]] [[Ricardo Martinelli]] had promised to implement a [[flat tax]] system with a flat tax of 10% and which promised to raise revenues, put inflation under control and which will allow enormous [[real wage]] gains.{{Citation needed|date=December 2009}} Instead the Martinelli government increased sales tax to 7% from 5%, as well as increasing other taxes, in order to finance many infrastructure projects around the country.

The current VAT rates are: 7% (standard rate); 15% (tobacco); 10% (alcohol and hotels); 5% (essential goods). The corporate tax rate is 25%, while the highest marginal income tax rate is 27%.