The Colon Free Zone, the duty free zone in Colon, Panama on the Caribbean end of the Panama Canal, is the world’s second largest of its kind.

The Colon Free Zone is embroiled in a dispute with the Panama government over paying taxes. It has come to where the bulk of the operators in the zone are going on strike Wednesday, September 2. This will put roughly 30,000 employees out of work for the day.

The issue has to do with tax advantages of operating in the duty free zone. The presence of these tax advantages has helped the zone grow and prosper. However, its presence on the Panama Canal is the major factor here. Now the new administration is adopting and enforcing a policy of each part of society paying its way. That appears to apply to those who have been paying less than the going rate for their taxes.

The issue is not, according to the government, legal exemptions but the fact that some of the operators have not been paying the reduced amounts that they owe and have not been providing the necessary paperwork to the government.

The issue in Panama comes back to corruption and who is paying their fair share. The ongoing rap against Panama is, in fact, corruption. Investment in Panama thrives on a fair system. Hopefully, as the issue of who pays taxes is resolved the issue of government corruption will go away to the benefit of investment in Panama.

The Colon Free Zone reports an increase in May exports and imports over 2008 figures, giving a 17 percent increase overall. This one month jump in activity has brought trade figures for the year back close to 2008 numbers for the first five months of the year.

This is welcome news considering the talk of drastically reduced activity and reduced worldwide shipping. We can take this as another sign of the worldwide recession mending itself.

As trade picks up again and general prosperity returns expect to see a surge in business in Panama as well as a more active Panama residential real estate market before year’s end.