Bill 691.

Summary.

The bill declares a special scheme for purchasing and importing new vehicles exclusively for public ground passenger transportation and school transportation to be in the public interest. Its aims include renewing the fleet, improving safety, giving authorized operators access to new vehicles, reducing costs, and promoting technologies with greater energy efficiency and lower emissions. It defines the covered vehicles, the authorized operator, and a new vehicle, which must be purchased from an authorized manufacturer, distributor, or dealer and must not have been registered or put into service in the Republic of Panama or any other country.

Authorized operators could request exemptions from national taxes on new vehicles and on spare parts, parts, components, accessories, oils, lubricants, tires, filters, equipment, materials, and other goods directly related to their operation, maintenance, and upkeep. The benefit covers ITBMS, import duties, the Selective Consumption Tax where applicable, and other national taxes for which fiscal legislation provides an exemption. It would also apply to purchases through financial leases with an irrevocable purchase option, for the direct benefit of the authorized carrier. The goods must be used for the authorized activity and meet technical, safety, and capacity requirements; service fees, charges, fines, surcharges, storage costs, and administrative expenses are excluded.

The scheme covers minibuses seating 8 to 25 passengers, medium buses seating more than 26 but fewer than 45 passengers, buses seating more than 45 passengers, and other vehicles designated by the Vehicle Traffic Regulations. Applicants must be authorized, registered in the records of the Land Transit and Transportation Authority (Autoridad del Tránsito y Transporte Terrestre), current on their tax obligations unless they have formalized payment agreements, and able to demonstrate exclusive use for the designated purpose and compliance with the Authority’s requirements. Applications are submitted to the General Directorate of Revenue (Dirección General de Ingresos) of the Ministry of Economy and Finance (Ministerio de Economía y Finanzas); for imports, they must be submitted before final assessment of the taxes. The transportation authority certifies the operator’s authorization and the vehicle’s intended use. School transportation vehicles must comply with road safety standards and requirements for mechanical condition, signage, capacity, and safety devices.

For 5 years from registration in the Unified Registry, vehicles receiving the benefit could not be sold, assigned, leased, transferred, or used for another activity. The bill also restricts transfers or other uses of separable goods acquired under an exemption. It allows the incentive to be used to replace vehicles at the end of their useful life, vehicles that are unsafe, or vehicles declared unfit; replacement programs require the replaced vehicle to be taken out of service. Early disposal of a vehicle requires payment of the exempted taxes in proportion to the time remaining; improper use of other goods requires payment of the applicable taxes. The bill provides for loss of the benefit, applicable penalties, periodic checks, and document retention. The benefit is personal and nontransferable.

The scheme would last 10 years from its entry into force. It requires an annual report on fiscal, economic, and social results; excludes personal uses and unauthorized activities; and bars duplicate benefits for the same tax. The Executive Branch (Órgano Ejecutivo) could establish additional incentives for low emission technologies without changing the benefits under Law 295 of April 24, 2022. Fully electric, hybrid, or zero emission vehicles would receive expedited processing and a 100% exemption from the specified taxes; operating certificates would be prioritized for those purchasing zero or low emission vehicles. The Executive Branch would issue implementing regulations within 120 calendar days after promulgation. The bill provides that it prevails over conflicting provisions and enters into force 6 months after promulgation.

The Ministry of Economy and Finance, the General Directorate of Revenue, the Land Transit and Transportation Authority, the National Customs Authority (Autoridad Nacional de Aduanas), the Executive Branch, and municipalities would be involved. The bill may be of interest to public and school transportation operators, concessionaires, vehicle distributors, regulated financial institutions, and suppliers of spare parts and equipment.