On July 30, the Economy and Finance Committee met to agree on the creation of a sub-committee to analyze Bill 229 concerning tax regulations for companies operating through digital platforms. The subcommittee is expected to move ahead with the study of the bill and prepare a report in the short term. The members of the committee also passed two bills to extend benefits for taxpayers in the context of the pandemic. The bills will now go to the National Assembly plenary for a second debate in the short term.
The bill regulating digital platforms was proposed in October 2019 by Raúl Pineda (PRD – ruling party), claiming that the document “seeks equal tax justice for all Panamanians on equal terms”, obliging “those who generate income to pay taxes”. For the new legislative period, Pineda was elected president of the Economy and Finance Committee. This allowed him to reinstate the bill on the agenda during the first meeting of the Committee held today. In this regard, he declared that the idea is to “tax big companies and not consumers”.
The most relevant points of the proposal are as follows: income tax is mandatory for all companies operating through digital platforms; tax withholding on the Transfer of Material Goods and Services (ITBMS) applies to types of businesses operating through digital platforms; and it all operations carried out by a digital commerce and transportation company must be performed with credit cards, unless the client uses the services of an intermediary to carry out the transaction, withhold ITBMS and pay import duties, among other provisions.
Additionally, the Committee passed two initiatives presented by the Minister of Economy to face the crisis in the first debate. Bill 359 extends the deadlines for a tax amnesty, establishes a 10% discount for prompt payment and reforms the tax code. Bill 360 modifies the deadlines established in Law 99 to facilitate tax payments due by February 29, 2020.