El Salvador is dropping the income tax from 30% to 0% for international investments and money transfers. El Salvador’s Congress approved the reform on Tuesday to remove income taxes previously imposed on money from abroad. The move was made to attract more foreign investment to the growing economy.
According to El Salvador lawmakers, money flows from abroad in forms such as remittances and investments in companies will now be exempt from taxes. Before the reform was passed, incomes equal to or greater than $150,000 had to pay a rate of 30%. This rate was paid upon entering the country.
“The initiative aims to stimulate domestic and foreign investment to boost the economy and generate better and more employment opportunities,” said lawmaker Suecy Callejas in Congress when defending the reform.
Also Read: El Salvador Bitcoin Investment Now at $84 Million Unrealized Profit
El Salvador is one of the fastest-growing economies in the world. The country has made millions in part due to its Bitcoin investments. Furthermore, the country’s increased interest in cryptocurrency is projected to rise thanks to the bullish market. Now, the country is looking to bring in more foreign investment to boost its economy.
The vote by El Salvador’s Congress to eliminate income taxes for money from abroad received 69 votes for “yes” and zero for “no.” Five voters voted to abstain.