The President of El Salvador, Nayib Bukele, wants to remove all taxes related to technological innovation. The proposal includes income taxes, property taxes, capital gains taxes and import duties, among others. An initiative that should probably appeal to many young companies wishing to save their capital.
Nayib Bukele takes El Salvador on a journey of technological innovation
El Salvadoran President Nayib Bukele continues to show his attraction to new technologies. Known for making Bitcoin (BTC) a legal currency in El Salvador, the small Central American country, Nayib Bukele has made it known that he will be sending a bill to Congress to remove all taxes related to technological innovation.
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.
– Nayib Bukele (@nayibbukele) March 24, 2023
According to the Salvadoran president’s tweet, this will affect income taxes, property taxes, but also capital gains taxes and import duties. Although he did not mention cryptocurrencies in his statement, the term technological innovation should, however, include artificial intelligence (AI), programming, computer coding or even the manufacture of computer and communication equipment.
The initiative was notably welcomed by Changpeng Zhao, the CEO of the cryptocurrency exchange Binance.
– CZ Binance (@cz_binance) March 24, 2023
An initiative that should be appreciated by a large number of entrepreneurs, as such light financial conditions constitute a fertile ground for young companies that sometimes have to save their capital. This is especially true when you consider the phenomenal momentum in artificial intelligence since the launch of ChatGPT.
Furthermore, while El Salvador has long been a rather low-key destination because of the crime rate, Nayib Bukele has launched a major offensive against organized crime, which has made headlines in recent weeks, especially because of the “mega-prison” built in the country to lock up gang members.
As a result, the homicide rate has been drastically reduced from 103 per 100,000 inhabitants in 2015 to 7.8 in 2022, the lowest rate ever recorded in El Salvador’s history. The President was initially elected on his security policy, which seems to have paid off.
Time will tell if the new measures that Nayib Bukele wants to put in place to attract young talent, combined with the drop in crime, will bring in new investors.
