Ke­jan Haynes

Lead Ed­i­tor–News­gath­er­ing

PANA­MA CITY–Min­is­ter of Fi­nance Dav­en­dranath Tan­coo says leg­is­la­tion to make pri­vate pen­sions tax free has been draft­ed and is now be­fore Cab­i­net, with the mea­sure ex­pect­ed to be in­clud­ed in a Fi­nance Bill due for Par­lia­ment by late Feb­ru­ary or ear­ly March.

Speak­ing in a one-on-one in­ter­view on the side­lines of the CAF In­ter­na­tion­al Eco­nom­ic Fo­rum in Pana­ma, Tan­coo said the pro­pos­al, first an­nounced in his 2026 bud­get pre­sen­ta­tion, was de­layed af­ter ques­tions arose over sup­port­ing da­ta. He said those is­sues have since been re­solved.

“The leg­is­la­tion has been draft­ed. I think it is be­fore the Cab­i­net as we speak,” Tan­coo said, adding, “I ex­pect there’s a Fi­nance Bill that is due pos­si­bly in the end of Feb­ru­ary, ear­ly March. It will be in­volved in that Fi­nance Bill. So that is com­ing.”

Tan­coo ini­tial­ly sig­nalled the mea­sure would take ef­fect from Jan­u­ary 1, but lat­er said par­lia­men­tary ap­proval was re­quired. He ex­plained the de­lay stemmed from the need to ver­i­fy da­ta to de­ter­mine how far the pol­i­cy could go with­out un­der­min­ing fis­cal sta­bil­i­ty.

“There was a lit­tle dif­fi­cul­ty in terms of the da­ta to ver­i­fy where we want­ed to go and that da­ta has since come in,” he said, adding that the draft leg­is­la­tion had now been placed be­fore Cab­i­net.

The pro­pos­al is part of a wider set of pen­sion-re­lat­ed re­forms, in­clud­ing re­cent changes to Na­tion­al In­sur­ance con­tri­bu­tions and re­tire­ment age thresh­olds, which Tan­coo said were nec­es­sary to pre­vent the Na­tion­al In­sur­ance fund from be­com­ing in­sol­vent.

“If we did not do that, what would have hap­pened is the Na­tion­al In­sur­ance fund would have gone bank­rupt,” he said, warn­ing such an out­come would have threat­ened fu­ture pen­sions and oth­er ben­e­fits with­in the life­times of cur­rent con­trib­u­tors.

Tan­coo framed tax-free pri­vate pen­sions as a pol­i­cy aimed at pro­tect­ing re­tirees’ in­come, while the Gov­ern­ment works to sta­bilise pub­lic fi­nances and ex­pand rev­enue through growth rather than new tax­es. He said broad­er fis­cal mea­sures were fo­cussed on widen­ing the rev­enue base and im­prov­ing tax col­lec­tion, rather than plac­ing ad­di­tion­al bur­dens on pen­sion­ers.

Once ap­proved by Cab­i­net and passed by Par­lia­ment, the mea­sure would re­move in­come tax on pen­sions, a change the Gov­ern­ment has pitched as re­lief for re­tirees amid ris­ing liv­ing costs.