Increase To Retiree's Pensions Will Be Funded With New Beer Tax

(Panama-Guide) (Editor's Comment: Background Information - The retirees have been out in the streets for weeks, demanding a $50 per month increase in their monthly pensions. In recent days Panamanian president Ricardo Martinelli has promised to make it happen one way or another, and right now they are trying to figure out where the money will come from. As part of the ongoing negotiations, the central government will pay 60% of the cost of the increase, while the Social Security Fund will pay the other 40%. Comments end, article begins.)

The 60% of the increase to retirees and pensioners that will be paid by the central government will not come from "the taxes that are paid by all Panamanians" according to president Ricardo Martinelli, but rather from "a common purse" which will be funded by an increase in the production costs of beer (from 3% to 5%), as well as the $3 million dollars per year that was being paid to fund the Central American Parliament, and the $33 million dollars that was being paid as a subsidy to the political parties. Those retirees who currently received less than $250 dollars per month will receive a $50 per month increase starting in 2011. Those retirees who receive between $250.01 and $375 dollars per month will receive an increase of $30 per month starting in 2012. And finally those retirees who receive between $375.01 and $500 per month will receive an increase of $20 per month starting in 2013. The economist John Jované says that instead of charging this bill to the Social Security Fund, the central government should assume the $200 million dollar cost of the increase. At this time the beer brewing companies had no immediate comment.

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Original Source: Panama-Guide

Date Retrieved: November 18, 2010.