El Salvador President Removes Taxation On Tech Innovations

El Salvador President Removes Taxation On Tech Innovations

Nayib Bukele, president of El Salvador and Bitcoin supporter, recently signed a law that removes taxation on technological innovations in the country. The Innovation and Technology Manufacturing Incentive Law (ITMI) revealed a wide spectrum of sectors where the complete removal of taxes applies.

Although countries like the US government want high tax payments on technological innovations such as cryptocurrency mining, this new law could attract companies with a focus on innovation, which will bring development to the country.

El Salvador boosts tech innovation by removing taxes

Nayib Bukele used her official Twitter on May 4, 2023 to to say who signed the new law to ensure that property, income, capital gains, import tariffs, software and application programming, AI, computer and communications hardware manufacturing taxes are fully removed going forward.

The law signed by ITMI has been in the works since March 2023, when the president of El Salvador made clear his intention to introduce a bill to safeguard the country’s innovative technological advances.

Following his intentions, a bill was sent to Congress to eliminate taxation of technological innovations in the country.

This newly signed law is just one of many efforts that the president of El Salvador has made for the country’s technological growth and development.

In January 2023, a Forbes India report published the news that claimed that El Salvador had established a legal framework and process for issuing Bitcoin-backed bonds, also known as “Volcano Bonds”.

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El Salvador’s Bitcoin-backed bond has been boosted for sovereign debt payments by developing a Bitcoin mining infrastructure by funding the construction of a project called Bitcoin City to scale sustainable crypto mining efforts.

A nation welcoming to innovative tech companies and crypto mining?

The law signed by Nayib Bukele earlier today can promote tgrowth and technological development of El Salvador as a nation and for manufacturing, technology and cryptocurrency companies operating in the country. With the tax exemption applicable to the sectors mentioned above, innovative companies abroad have an incentive to move their operations to a country with positive tax legislation.

Nayib Bukele’s Efforts to Build a Bitcoin city near the Conchagua volcano in the country will exponentially escalate BTC mining activities by corporations. oeThe energy needed for mining will be obtained directly from the volcano, which generates hydrothermal energy.

While the US recently proposed a 30% tax on cryptocurrency mining operations, El Salvador continues to foster a thriving technology innovation ecosystem.

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