Panama’s Ministry of Economy and Finance (MEF) is preparing to implement a 7% tax on digital services provided from abroad. This new measure aims to generate revenue from services like streaming, software, and online advertising offered by foreign companies to Panamanian consumers. The government emphasizes that, despite the new tax, Panama’s rate remains one of the lowest in the region, citing a comparison to a 19% tax rate elsewhere. The tax, technically an application of the ITBMS (Value Added Tax), seeks to level the playing field between domestic and foreign service providers. Officials believe the tax will contribute to increased government revenue while remaining competitive. The implementation details are currently being finalized. This initiative reflects a wider trend of countries seeking to tax the digital economy.