What Happened
San Miguelito Mayor Irma Hernández questioned the handling of property tax revenues during a session of the National Assembly’s subcommittee on Municipal Affairs, where lawmakers are reviewing reforms to the Decentralization Law. She argued that municipalities should receive the full amount of the Property Tax, known as IBI, as required by law.
“We are fighting to be able to have what the law already stipulates. The law already states that the Property Tax must be given in full to local governments,” Hernández said.
What Hernández Says About the Money
Hernández pointed to a gap between what the central government collects and what reaches local governments. She said the state collects about $200 million in property tax, but only about $80 million is transferred to municipalities.
Her question — “What about the rest?” — reflects a broader concern among local authorities about how public funds are distributed and whether municipalities are receiving the resources they are due.
Why the Debate Matters
The discussion comes at a time when the National Assembly is evaluating possible changes to the Decentralization Law, one of the key rules governing the flow of funds to local governments. Municipal leaders have argued that these resources are necessary to support everyday public services and local development projects.
Property tax is one of the main sources of financing for municipalities in Panama, making its distribution a recurring issue in debates over decentralization and local autonomy. For city halls, access to these funds can affect the pace of community works, service delivery, and planning at the local level.
Broader Implications for Municipal Governments
Hernández’s remarks bring renewed attention to the relationship between the central government and municipalities over fiscal control. The issue goes beyond San Miguelito, touching on how local governments across Panama fund basic responsibilities and manage development needs.
As reforms to the Decentralization Law move through the Assembly, the distribution of IBI revenues is likely to remain a central point of contention for mayors seeking a larger and more predictable share of tax income.