Bill 689.

Summary.

The bill would grant Panamanian nationals and foreign residents in the national territory who are up to twelve years of age a twenty percent (20%) discount on the price of medicines purchased at public and private pharmacies throughout the country. To receive it, a child must have a medical prescription issued in the child’s name by a duly qualified medical practitioner. The benefit would apply regardless of the child’s gender or social condition.

Private pharmaceutical establishments that grant the discount would be entitled to a tax credit equal to one hundred percent (100%) of the discounts actually applied and accumulated during the relevant tax period. The credit would be applied directly against the Income Tax (ISR) assessed as payable on the annual income tax return of the individual or legal entity that owns the establishment. The bill provides that this mechanism does not require a fund to be created within the General State Budget.

If the annual tax credit exceeds the Income Tax assessed as payable, the excess would not entitle the taxpayer to a cash refund from the State. The taxpayer could carry the remaining credit forward to offset Income Tax in subsequent tax periods, for a maximum of three years. To validate the credit, establishments would have to meet the requirements set by the Directorate General of Revenue (DirecciÓn General de Ingresos): issue electronic invoices showing the medicine’s price, the discount percentage and the final amount charged; keep a record of the child’s identity, supported by a youth identity card or birth certificate, and of the medical prescription; and refrain from recording an amount used as a direct tax credit simultaneously as an expense deductible from taxable net income.

The Consumer Protection and Competition Defense Authority (Autoridad de Proteccfón al Consumidor y Defensa de la Competencia), identified in the bill as ACOOECO, would hear and resolve complaints against pharmaceutical establishments that breach its provisions. It would also require establishments to display the discount where beneficiaries can see it and supervise compliance with that requirement. Individuals or legal entities that refuse to apply the discount would be fined by the Consumer Protection and Competition Defense Authority (Autoridad de Protección al ConsumidOf y Defensa de la Competencia), identified as ACODECO, from fifty balboas (BI.50.00) to five thousand balboas (BI. 5,000.00). The amount would take account of the seriousness of the breach, whether it is repeated, and other applicable factors.

The bill makes the discount nontransferable and confines it to the circumstances described in Art. 1. It would take effect on the day following its promulgation in the Official Gazette. Its provisions concern the Directorate General of Revenue, ACOOECO and ACODECO, and could affect or interest resident children and their families, public and private pharmacies, and taxpayers who own pharmaceutical establishments.