El Salvador President To Eliminate All Taxes on Technology Innovations

Sahana Kiran
El Salvador
Source – America Magazine

Aiding innovation certainly opens up several doors. However, suppression from centralized entities will hinder this growth. As the rest of the world deals with banking and other economic crises, El Salvador is clearly focused on technological evolution. As a result, President Nayib Bukele plans to completely remove all taxes on technological advancements.

In a recent tweet, Bukele notes that all taxes, including income, property, and capital gains, as well as import tariffs, will be eliminated. Additionally, this hasn’t come to fruition yet. The President said that he will be sending a bill to Congress next week.

Furthermore, the President notes that “technology innovations” will include AI development, coding, and apps, among others. Elaborating on the same, Bukele tweeted,

“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, as well as computing and communications hardware manufacturing.”

Will El Salvador emerge as LATAM’s tech hub?

El Salvador’s latest move did not come as a surprise considering the country’s drive towards technology. Over the last couple of years, President Bukele was focused on embracing financial technology through Bitcoin [BTC]. Last week, the country even launched a Bitcoin/Lightning developer training program. In addition to this, the much-awaited Bitcoin bonds are expected to roll out sometime between June to September.

While Bitcoin is undoubtedly relevant in today’s world, artificial intelligence has taken the world by storm. With increased interest in AI and El Salvador’s potential tax-free haven, developers could soon veer into the region. An entrepreneur said,

“Considering El Salvador is dollarized, this incentive will likely put it at the forefront in tech Latam. If this bill gets approved, I’ll expand @Geeky_Drop to El Salvador and cancel plans to go to Costa Rica. Honestly, a no-brainer.”

Similarly, a plethora of Twitter users went on to suggest that they plan on moving to El Salvador. Some even expressed gratitude by thanking Bukele for his latest move. VanEck’s Gabor Gurbacs said,

“El Salvador is getting better by the day!”