El Salvador's President, Nayib Bukele, has announced plans to propose the elimination of all taxes on technology, reported first by Interesting Engineering on Friday, March 25.
Bukele intends to introduce legislation to the country's legislature next week that would eliminate all taxes on technological innovations, computing, communication hardware manufacturing, and among other things.
"Next week, I'll be sending a bill to congress to eliminate all taxes (income, property, capital gains, and import tariffs) on technology innovations, such as software programming, coding, apps, and AI development," the president tweeted on Friday.
SAN SALVADOR, EL SALVADOR - SEPTEMBER 15: In this handout image released by Casa Presidencial El Salvador President of El Salvador Nayib Bukele announces he would run for re-election despite the country's constitution prohibiting presidents from having consecutive terms during a speech on El Salvador's Independence Day on September 15, 2022 in San Salvador, El Salvador.
Modernizing El Salvador's Economy
This proposed legislation is part of the Bukele administration's broader efforts to modernize El Salvador's economy and reduce its dependence on traditional sectors such as industry and agriculture.
The goal is to encourage the development of El Salvador's technology industry and increase foreign investment in the country.
To achieve this goal, the government has been funding entrepreneurship programs, education initiatives, and infrastructure projects. If the bill is approved, El Salvador could become a prime location for tech firms and startups looking to establish a business in Central America.
Bitcoin-friendly Country
However, it is still unclear whether the proposed regulation would apply to Bitcoin (BTC) applications. El Salvador is known for being Bitcoin-friendly, and in 2021, it became the first country to legalize cryptocurrencies.
Earlier this year, the country's legislature approved a measure welcoming a bond supported by Bitcoin.
President Bukele is keen on making his nation a hub for cryptocurrencies, and he has plans to establish the first "Bitcoin City" and make Bitcoin legal tender in 2021.
To improve financial inclusion, make it simpler for its citizens to send money home from abroad, and lessen reliance on the US currency, El Salvador became the first government in Central America to accept Bitcoin as a legal tender.
The move was questioned by the International Monetary Fund (IMF), which still has doubts about El Salvador's adoption of Bitcoin.
Finbold, a financial news source, reports that the IMF acknowledged that the dangers related to El Salvador's acceptance of Bitcoin "have not materialized" in February 2023.
Despite some initial skepticism and criticism, many people have welcomed El Salvador's decision to accept Bitcoin as a brave and innovative action that could open the way for other nations to follow suit.
The rest of the world will be intently monitoring the success or failure of this experiment as the position of cryptocurrencies in the global economy continues to change.
The newest effort to attract technology enthusiasts with tax-free incentives could be another step toward making El Salvador a convenient commercial hub.
If the measure is approved, it might help El Salvador establish a reputation for being a tech-friendly nation, luring additional investment and spurring expansion in the sector.
Related Article: MoneyGram and Western Union Could Lose $400 Million if Crypto Wallets in El Salvador Start Gaining Traction
