This post will probably generate a bunch of comments from the expat community who feel that the 25% discount they receive from restaurants are justified. After all, the government has it as a law, and many expats came here with that being part of the reason for doing so. To change it is not fair.
On the other hand, the restaurant operators argue that they did not have a say in the law and to be forced to discount is unjust. They believe the government should give them tax breaks or rebates for the amount of discounts they are forced to give. As an owner of a resort with restaurants you know what side of the argument I am on. My bet is that the law will be changed in the near future to eliminate or subsidize the discount. The fact is that many new hotels and restaurants are opening all over the country and they are finding the discounts are making it impossible to keep prices down and quality up. Some operators looking to invest in the country are saying they cannot afford to take the risk under such terms. Something has to give and my bet it will be some kind of subsidy or tax break. In any case it really just spreads the burden out over the whole of society rather than just the business operator. This article points out that the restaurants were reimbursed 30% of the 25% discount and now that has been eliminated by the alternative minimum tax. With that tax even if the operation loses money, it must pay a minimum tax on its gross receipts, and you can't consider the discounts. This is another example of whenever the government gets involved in regulating prices, things get screwed up.
From LA Prensa
The restaurant industry wants the government to reconsider a 25 percent discount for retirees.
Restaurant owners don’t oppose the discount, but they don’t want to bear the cost of a government policy.
| LA PRENSA/Archivo |
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| cheap eats:The Asociación de Restaurantes y Afines de Panamá (Arap) has criticized the government mandated discount for seniors, which it says forces restaurants to pick up too much of the tab.1060211 |
The Asociación de Restaurantes y Afines de Panamá (Arap) has called for the government to reconsider the discount guaranteed to seniors and retirees by law, claiming that it unfairly burdens the restaurant industry.
Arap advisor Rino Tamburelli explained that before the Cálculo Alternativo del Impuesto sobre la Renta (Cair) went into effect, the government compensated restaurants for 30 percent of the 25 percent discount. In other words, he said, “For every dollar that we discounted, we got back 30 cents.”
After the Cair was established, however, effectively none of the discount was reimbursed, since taxes are now charged on the items ordered, while not taking the amount of the discount into account, he added.
Tamburelli said that the discount is a commitment on the part of the government, not private enterprise.
“We’re not against the discount,” he said. “On the contrary. But merchants should not have to finance public policies.”
The restaurant sector has requested that the Ministerio de Economía y Finanzas (MEF) deduct the discount given to seniors from taxes.
MEF sources explained that the discount does not carry tax credits and that the merchant is therefore obligated to assume the cost. Moreover, the law does not suggest that restaurants will be reimbursed for the discount.
As a consequence of the financial burden placed on restaurants, Arap president Leopoldo Liakópulos said, retirees might not receive the best service at some restaurants because their business isn’t profitable.
Rafael Medina, an advisor to the Confederación de Asociaciones de Jubilados, confirmed that at times retirees feel that their food portions are reduced or that the servers ignore them.
Another consequence of the discount, she added, is that the restaurants might increase prices to compensate for their losses, which affects everyone.
