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4.41. Conventional sources have historically accounted for the bulk of power generation in Panama. However, diversification in the energy matrix began in 2014 and, since then, the use of renewable sources to generate power has risen (Figure 4.1). Currently, the primary sources used are wind and solar energy; biomass is used chiefly in farming. The rise in the use of clean or renewable sources may reflect the incentives that Panama offers to promote the use of technologies that help to reduce the impact of climate change and dependency on imported fuel (Table 4.6). According to the authorities, the value of the incentives granted during the review period is not available.

Table 4.6. Incentives for clean or renewable power generation, 2014 and 2020:
Legal basis: Law No. 45 of 4.8.2004; Project: Construction, operation and maintenance of power plants running on hydroelectric power or renewable or clean energy; Description: Exemption from tariffs on equipment and spare parts, 25% tax credit applicable to income tax (IR)
Legal basis: Law No. 42 of 20.4.2011; Project: Construction, operation and maintenance of power plants running on biomass; Description: Exemption from tariffs for machinery and inputs for a period of 10 years from when the plant first becomes operational, Exemption from Tax on the Transfer of Movable Property and the Provision of Services (ITBMS) for imported machinery and inputs purchased on the domestic market, for a period of 10 years from when the plant first becomes operational, Exemption from IR for a period of 10 years from when the plant first becomes operational
Legal basis: Law No. 44 of 25.4.2011; Project: Construction and operation of wind farms; Description: Exemption from tariffs on equipment and spare parts
Exemption from Tax on the Transfer of Movable Property and the Provision of Services (ITBMS) for imported equipment and parts purchased on the domestic market, 5% tax credit applicable to income tax (IR)
(...)
Legal basis: Law No. 37 of 10.6.2013; Project: Construction, operation and maintenance of solar power stations and/or farms; Description: Exemption from tariffs on equipment and spare parts, Exemption from ITBMS for imported equipment and parts purchased on the domestic market, 5% tax credit applicable to income tax (IR)

4.47. (...) Under the Industrial Promotion Certificate (CFI), companies receive a 40% refund on any investment they make, for example (...) quality and environmental protection (...)

4.135. (...) To encourage vessel registration, the Directorate-General of the Merchant Marine (DGMM) grants discounts on the registration fee, which usually last for three consecutive years. For example, shipping companies that register at least three vessels receive discounts of between 25% and 60%; new vessels can obtain discounts of up to 100% for the first year of registration; and, since 2016, vessels that comply with certain environmental standards benefit from a 50% discount. (...)

4.143. According to the new Regulations on the Granting of Operating Licences for Auxiliary Maritime Services, from 2019 operating licences will be granted by type of service (or cluster); there are currently nine types of service. [188] (...)
[188] Provisioning; shipping agency services; ship and port facility inspections; maritime and port manoeuvres; construction, repair and maintenance of ships and port facilities, waste management and fumigation; transport; mobile offshore drilling unit service; safety and hygiene; and nautical tourism

4.150. (...) In addition to tolls, a freshwater usage charge has been levied since 2020. This charge is composed of a fixed component (PAB 10,000) and a variable component, consisting of a percentage of between 1% and 10% of the toll value, determined according to the availability of water at the time of transit. The higher the water level at the time of transit, the lower the percentage charged and vice versa. (...)

4.155. Panama did not revise its legislation governing tourism during the period under review. This legislation includes Laws No. 73 and No. 74, both of 22 December 1976, and Executive Decree No. 82 of 23 December 2008. The Government's 2019–24 Strategic Plan recognizes the need to update legislation in order to regulate new tourism products. [212]
[212] Among others, health, rural, sports, cultural, adventure, gastronomic, convention and exhibition tourism and ecotourism.

4.157. In Panama, tourism is considered a sector of national priority interest. Since the previous review in 2014, the objectives for the development of the sector have not changed. Panama seeks to increase the sector's contribution to GDP and employment by promoting an inclusive and sustainable tourism model and positioning itself as a world-class tourism destination by consolidating and diversifying its international tourism offerings. (...)

Table 4.19. Main incentives granted to tourism enterprises, 2014–20:
Legal framework: beneficiaries and requirements; Incentives; Amount of exemptions 2014–20 (PAB):
(...)
Article 5 of Law No. 80 of 08.11.2012, amended by Law No. 82 of 18.04.2019: tourist accommodation having up to 50 rooms and having obtained the tourism quality label awarded by the ATP, Investment requirement: none; Tariff exemptions: (...) from 2019, energy-saving equipment (five years), Exemption from income tax (five years) and property tax (10 years); ..,..
(...)
Article 8 of Law No. 80 of 08.11.2012, as amended by Law No. 91 of 26.12.2017 and regulated by Executive Decree No. 319 of 03.12.2020: companies marketing "special tourism products": (...) ecotourism (...) Investment requirement: between PAB 5,000 and PAB 300,000, depending on the product.; Tariff exemptions: building materials (five years); fixtures, furniture and equipment, including vehicles (10 years), Exemption from ISC and ITBMS: building materials (five years); fixtures, furniture and equipment, including vehicles (10 years), Exemption from income tax (15 years); .., ..., ..
(...)

3.35. Panama continues to grant tariff exemptions on imported goods under various laws to promote the development of specific sectors/activities such as tourism, reforestation, mining, renewable energy, and the shipbuilding industry (section 3.1.4 and section 4). (...) In addition, through the National Industrial Competitiveness Programme (PNCI), a 3% deduction on import taxes is granted on raw materials, semi-finished or intermediate goods, machinery, equipment, spare parts, containers and packaging used in the agro-industry, and in the manufacturing, aquaculture, forestry and fisheries industries.