Panama's economy and finance minister Alberto Vallarino Clément has presented a bill to congress to exempt contractors from paying the import, transfer of goods and services (ITBMS) tax on local cement used for construction works on the Panama Canal.
The measure aims to lower the cost of building the third set of locks on the canal, according to a release from the national assembly.
The tax exemption would extend to contractors hired by canal authority ACP to carry out work on the canal, allowing them to purchase the necessary amount of cement on the local market without paying the ITBMS tax.
ACP can currently use imported cement for the canal expansion project without paying the ITBMS. However, the tax exemption does not currently apply to local cement.
The canal's third set of locks is being built by consortium GUPC, formed of Spain's Sacyr Vallehermoso, Italy's Impregilo, Belgium's Jan de Nul and Panama's Constructora Urbana (Cusa). Mexican firm Cemex signed a contract with the group in July last year to supply 500,000t of cement for the project.
The canal expansion aims to double the waterway's capacity, allowing more traffic and longer, wider ships. The project began in 2007 and is due for completion in 2014, with a final cost of some US$5.25bn.