Bill 192.

Summary.

The bill proposes to promote floating biodegradable barriers in rivers of the Republic of Panama (República de Panamá) that flow into the sea, aiming to intercept floating solid waste before it reaches marine ecosystems. Individuals, companies, nonprofit organizations, public bodies and local communities could participate in installing, maintaining and promoting the barriers. The bill defines them as floating structures made of biodegradable materials and sets out definitions of solid waste, marine ecosystems, their deployment and their function in retaining waste.

The State would promote installation gradually, giving priority to rivers with higher levels of solid waste pollution. Installation would depend on technical and environmental studies of each river’s characteristics and pollution levels and of the specifications needed for the barriers to work effectively. The Ministry of Environment (Ministerio de Ambiente) would be responsible for implementation, oversight and maintenance, in coordination with municipalities and other public and private bodies. Together with municipalities, it would also encourage civil society, companies and nongovernmental organizations (NGOs) to take part in cleaning, monitoring and conservation, as well as educational campaigns on waste reduction.

Those responsible for implementing the barriers who fail to comply with the bill’s provisions would face fines set by the Ministry of Environment. The fines would be proportionate to the seriousness of the violation and used to fund environmental cleanup and restoration. The ministry would establish ongoing control and oversight mechanisms to check that the barriers function properly and that solid waste in rivers is effectively reduced.

Companies allocating funds through Corporate Social Responsibility programs to barriers or river waste reduction programs could deduct up to 100% of related expenditure, subject to a ceiling of up to 10% of taxable net income. Purchases of materials, equipment and services used exclusively to install barriers would receive a partial exemption from the tax on transfers of movable property and services. The bill also provides for annual public recognition of participating companies. The Ministry of Environment and the Directorate General of Revenue (Dirección General de Ingresos) would create a register; companies would have to enroll to receive tax benefits. Both bodies would verify how the funds were used. Irregularities would result in loss of the benefit, repayment of deducted amounts, and applicable administrative and tax penalties.

For nonprofit NGOs managing barrier projects, the bill provides for income tax exemptions concerning cash donations, recycled materials or specialized services, in accordance with Article 1 of Law 223 of 2021 (Ley 223 de 2021). NGOs endorsed by the Ministry of Environment that implement projects would receive, for five years, exemptions from income tax, tax on dividends or participation shares, and import tax on equipment and machinery. They would still file an annual informational income tax return with the Directorate General of Revenue of the Ministry of Economy and Finance (Ministerio de Economía y Finanzas). NGOs replacing waste management or river pollution processes or technologies with sustainable ones would receive, for five years, an import tax exemption and a 15% income tax discount.

To request benefits, NGOs would need to complete the required legal procedures and permits, obtain the Ministry of Environment’s prior endorsement and apply to the Directorate General of Revenue under rules set by the Executive Branch (Órgano Ejecutivo). The bill excludes replacement materials outside the categories specified in Law 223 of 2021 and legal entities that collect recyclables for export. The Executive Branch would regulate NGO procedures and endorsement requirements. The proposed law would take effect 1 year after promulgation and official publication in the Official Gazette (Gaceta Oficial) of the Republic of Panama. Its provisions concern municipalities, companies, NGOs and local communities, as well as sectors involved in waste management, materials, equipment and environmental services.