Panama’s Vice Minister of Economy clarified a proposed 7% charge on digital purchases isn’t a new tax, but a modernization of the fiscal code. The initiative aims to collect Value Added Tax (ITBMS) from international service providers. Currently, these providers operate largely untaxed within the country. This update seeks to create a level playing field between local and foreign businesses offering similar services. The government anticipates generating additional revenue through this measure, described as a “substitute income.” Officials emphasize this is about updating regulations to reflect the digital economy, not imposing a novel burden on consumers. The change will impact purchases of digital services from international companies.