The Minister of Economy and Finance, Héctor Alexander, introduced a bill to the National Assembly to impose stricter controls on corporations registered in the Public Registry of Panama that report non-compliance with their obligations.

Currently, Article 318-A of the Tax Code states that corporations, any national or foreign legal entity, and private interest foundations must pay a fee upon registration with the Public Registry of Panama and, consequently, commit to paying an annual flat fee in subsequent years to maintain their full validity. Non-profit organizations, cooperatives, and civil partnerships are exempt from paying these annual flat fees.

It is also indicated that failure to pay the annual flat fee results in the suspension of registrations and the non-issuance of certificates by the Public Registry. If the legal entity defaults for two consecutive periods, this will result in late payment charges, the application of a fine of three hundred balboas (B/. 300.00), and a marginal annotation indicating that it is in arrears.

The new bill proposes that, if the legal entity continues to fail to comply with its obligations for 3 months after the deadline for compliance, the Directorate General of Revenue will order the Public Registry to dissolve the corporation. The dissolved corporation must then proceed with its liquidation in accordance with the law.

With the implementation of this new bill, the Directorate General of Revenue will provide semi-annual reports to the Public Registry on those corporations that are in arrears for three consecutive periods or more.

This bill was introduced on July 28 and remains pending review by the Legislative Body.