---
title: "Panama City Mayor Warns Central Government Is Withholding IBI Funds, Threatens Cuts to Local Projects"
date: 2026-03-25
author: ""
url: https://panamadaily.news/2026/03/25/ibi-transfers-mizrachi-warns/
categories:
  - "Economy"
  - "News"
  - "Politics"
tags:
  - "decentralization"
  - "IBI"
  - "Mayer Mizrachi"
  - "MEF"
  - "municipal funding"
---

# Panama City Mayor Warns Central Government Is Withholding IBI Funds, Threatens Cuts to Local Projects

## What Happened

Mayer Mizrachi, mayor of Panama district, has publicly accused the central government of retaining funds from the Impuesto de Bienes Inmuebles (IBI) that, by law, should be transferred to municipalities. Mizrachi says the Ministry of Economy and Finance (MEF) is not fully delivering the IBI resources established under Law 66 of 2015 and announced an additional 12% reduction this week that will force municipal cutbacks.

## Background and Figures

Law 66 of 2015 reforms decentralization rules and stipulates that municipalities must receive the prior year’s IBI revenue, including fines and surcharges. Mizrachi cited statistics presented by the National Authority of Decentralization director, Roxana Méndez, during the National Assembly budget hearings: between 2021 and 2026 the state collected $1,107 million in IBI but transferred only $618 million to municipalities.

## Mayor’s Case and Reactions

“Yo soy una persona que se arropa hasta donde le llega la manta… Pero, ante lo que está pasando, me toca declararlo y decirlo abiertamente,” Mizrachi said, stressing that higher overall tax collection has coincided with lower municipal distributions. He accused the central government of effectively financing itself with local government revenues and said the transfers are being deliberately underestimated so the state can retain a significant share.

## Impact on Local Projects

The municipality of Panama had planned a 2026 agenda including street and sidewalk rehabilitation, inclusive playgrounds, smart bus stops, expanded video surveillance and upgrades to municipal pools. Mizrachi warned that with the announced cuts the city will be forced to reduce investments and postpone or cancel projects. He noted that municipal governments are often the first point of contact for citizens and said underfunding harms service delivery and local infrastructure.

## Wider Political and Institutional Implications

Mizrachi has sent a letter to the MEF and President José Raúl Mulino and intends to raise the issue at the Association of Municipalities of Panama. He said other local leaders — including San Miguelito mayor Irma Hernández and Colón mayor Diógenes Galván — have raised similar concerns. Officials have said municipalities have lost nearly $500 million in the last five years, a shortfall that affects all 81 municipalities and their ability to finance essential community projects.

## What This Means

The dispute highlights tensions in Panama over decentralization and fiscal transfers. If transfers remain below legally required levels, municipalities may scale back basic services and investments, increasing pressure on national authorities to clarify transfer mechanisms and comply with Law 66 of 2015.