Nayib Bukele, president of El Salvador, has ratified a law granting a total tax exemption to technology companies. The move is aimed at attracting investment from the sector and fostering job creation.
Total Tax Exemption for Tech Companies
If you run a tech company or are considering starting one, this news may be of interest to you. The law “Innovation and Technology Manufacturing Incentives Act, providing a full tax exemption for technology companies, went into effect on May 4, 2023, as announced by Nayib Bukele, the president of El Salvador.
This exemption ranges from income tax to import duties to capital gains tax. The companies involved operate in the fields of technological innovation, software and application programming, artificial intelligence, and the manufacture of computer and communications equipment.
Proposed by Nayib Bukele last March, the law aims to spur technological innovation, attract investors and create jobs. This is in contrast to policy in the United States, where President Joe Biden is considering a 30% tax on cryptocurrency mining players. Fortunately, this proposal is not unanimously supported, even within the Democratic Party.
El Salvador a tech pioneer thanks to its visionary leader Bukele
El Salvador is a leader in technology adoption. Under the leadership of Nayib Bukele, the country was the first to legalize ‘Bitcoin’ in 2021, a decision widely criticized by “elites” who foresaw a major financial crisis.
However, the facts proved otherwise. El Salvador has paid off all its debts before their due date and has increased tourism by 95%. The IMF, which predicted an unprecedented financial crisis, finally admitted that Bitcoin did not ruin the country.
Will El Salvador be the next hot spot for tech companies? All signs point to yes. The tax exemption, legalization of Bitcoin, and reduction in crime make the country a great environment for tech innovation. It will be interesting to watch the evolution of tech companies in the coming months and years.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.