Panama vows to adopt international tax reporting standards by 2018

Panama will adopt international tax reporting standards and participate in the automatic exchange of tax information by 2018, President Juan Carlos Varela told Japanese media on Tuesday, as his country came under a harsh spotlight in the wake of revelations arising from the "Panama Papers" controversy.

"To prevent the illegal use of Panama's financial systems, we would like to co-operate with other countries to improve transparency," Varelatold broadcaster NHK on Tuesday, during a visit to Tokyo.

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Members of the Organization for Economic Cooperation and Development, which helped establish the information-exchange scheme, will visit Panama as early as this week to negotiate specific methods for sharing information, Varela told the Nikkei newspaper.

The agreement on automatically swapping tax information, which around 100 countries have now joined, is due to come into effect in 2017. The leak of thousands of confidential documents from a Panamanian law firm earlier this month highlighted Panama's failure to cooperate in international efforts to clamp down on tax evasion by the rich and powerful.

Varela's comment comes after OECD chief Jose Angel Gurria said on Thursday that Panama has decided to adopt international tax reporting standards. Panama will also set up a committee of six to eight domestic and foreign experts within six months to make the Panamanian financial system more transparent, Varelatold several Japanese media.