LatinNews Daily - 21 June 2022

In brief: Panama’s Cortizo sanctions bill promoting tourism

* Panama’s President Laurentino Cortizo has sanctioned a legislative bill (789), which offers new tax incentives aimed at promoting tourism. In line with a sustainable tourism master plan approved by the government in 2021, the initiative stipulates that capital invested in bonds, shares and other financial instruments issued by tourism companies will be considered a 60% tax credit for income tax purposes (excluding the value of the property and infrastructure), among other things, down from 100% under a 2020 law (122) which the new law repeals. It also modifies law 80 of 2012 which also relates to tax incentives related to the tourism sector. Cortizo said that law 789 is “self-financing” as it will kick-start tourism-related construction which will generate revenue for the state, which in turn will compensate for the tax credits. He said that the objective is to consolidate Panama as a world-class tourism destination, and aims to construct at least 5,000 new hotel rooms in the interior of the country (the new law does not apply to projects in Panamá district where the capital is located). He said that this could generate some 3,000 jobs in the construction sector over the next two years and over 2,000 permanent jobs in the hotel industry. He said that there were currently 39 projects which had begun the certification process to benefit from the incentives under law 122 for a total of US$2.94bn.

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