PANAMA government's revenues increased  by 5.8 percent to $7.389 billion at the close of 2016, up $404 million, over the previous year.

But, despite the increase, the amount collected was $249 million (3.3 percent) short of the amount needed to cover budget projections, ($7.639 billion) said the  General Revenue Office in its preliminary year­end report Taxes represented 72.6 percent of the amount collected, generating $5.363 billion, 9.2 percent more than the previous year and 1.2 percent over what had been budgeted.

Tax revenues surpassed the $5 billion barrier for the first time, said Revenue Director Publio Cortés.

"In a country with so many exemptions and with such high tax evasion rates as Panama, it is extraordinary that tax revenues grew faster than the economy," he said.

According to the report, the increase is due to regulatory changes that were made to streamline tax collection.

In 2016, more than 100 large companies were forced to withhold half of the transfer tax on movable goods and services (Itbms) that they pay to suppliers.

This measure sought to ensure that the tax paid by consumers actually reached the Treasury. The initiative also allowed adding "several thousand taxpayers" to the roles.

Tax revenue consists of direct and indirect taxes. Among the first, the most important is  income tax, which generated $2.434 billion, 15.1 percent more than in 2015.

The tax paid by companies generated $1.027 billion, 20.7 percent more than a year earlier.

The real estate tax, which is transferred annually to the municipalities of the country as part of

the  decentralization program for public administrations, generated $168.4 million, an increase of 11.5 percent as compared to 2015.

Indirect taxes, on the other hand, accumulated $ 2.526 million, a 4.7 percent increase. This

includes the Itbms, which increased 17.5 percent to $937 million. Fuel tax, raised

$200 million, 27.6 percent more than in 2015.

The amount collected for non­tax revenues was $1.917 billion, 0.7 percent less than in 2015.

This line includes contributions from the Panama Canal.

For 2017, Cortes said the expectation is positive, but "we must take into account that it is a year that will be compared to 2016  which has been an exceptional year.