President Nayib Bukele undoubtedly put El Salvador on the map through increased adoption of Bitcoin [BTC]. Now, the country intends to stay on top of every emerging technology. Last month, Bukele called for the elimination of tax on artificial intelligence businesses. At the moment, the development has come to fruition as it received lawmakers’ approval as well.
On April 18, the members of the ruling party of El Salvador signed a bill approving the tax cut initiative. This means firms developing AI as well as other computer programming innovations will be exempted from paying taxes for 15 years. The latest law exempts select corporations from paying municipal taxes, capital gains taxes, income taxes, and tariffs on imported commodities that are necessary for technological industries. New Ideas lawmaker, Rodrigo Ayala said,
“With these exemptions, we are facilitating the development of the technological sector in our country, and manufacturing as well, which will help a new industry emerge.”
The President signed the legislation earlier this month. However, Congress had to give the go-ahead. The El Salvador Congress entails mostly of members of Bukele’s New Ideas Party.
In the 84-member unicameral legislature, 69 Salvadorian lawmakers voted in favor of passing it.
Is El Salvador trying to get ahead in the AI race?
The Nayib Bukele-led country has caught the tech bug. From fintech to innovations in almost every other sector, El Salvador has been in the limelight. El Salvador’s Bitcoin-centric move brought immense attention and boosted the tourism of the country. Now, with the exemption of taxes, several businesses are expected to steer toward the country.
Another reason why the LATAM region could lure in AI firms is because of the regulations that have been stemming across the globe. Given the emergence of AI, several nations have been attempting to regulate the industry. With more friendly laws in El Salvador, it is speculated to emerge as a tech hub in LATAM.