The President of El Salvador, Nayib Bukele, has officially signed a law that eliminates taxes on innovative technologies in the Central American country. The new law seeks to encourage technological manufacturing, software creation, coding, and the development of artificial intelligence in El Salvador.
The bill was approved on April 19 by the Legislative Assembly of El Salvador with a unanimous vote of 69 votes in favor and none against. The law exempts these technologies from taxation for a period of at least 15 years.
I’ve just signed into law, the INNOVATION AND TECHNOLOGY MANUFACTURING INCENTIVES ACT, that eliminates all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing. pic.twitter.com/rZtGzPgVzW
— Nayib Bukele (@nayibbukele) May 4, 2023
Deputy Elisa Rosales affirmed during the plenary session that the new Legislative Assembly and the Executive Power are working to position the country as a leader in Latin America in technological manufacturing. The law contemplates five incentives that will last for 15 years and does not establish a minimum investment amount to encourage the participation of all StartUps.
For his part, Deputy Estuardo Rodríguez pointed out that the Law for the Promotion of Innovation and Technological Manufacturing “will contribute significantly to the economic development of the country”, generating more jobs for young people.
El Salvador bets on technological innovation
This measure is part of a series of technological initiatives that President Nayib Bukele has implemented in recent months in his country. In June 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender, which has generated great interest in the Central American nation.
With the signing of this new law, El Salvador seeks to consolidate itself as a leader in the region in emerging technologies and attract foreign investment. In addition, the new law will also eliminate the capital gains tax, paid when profits are obtained from the sale of an asset.
The Central American country is working to improve its economy and generate more jobs for its citizens through the adoption of emerging technologies. Eliminating taxes on innovative technologies is a big step towards achieving this goal.
This measure can also have a big impact on the cryptocurrency sector, since El Salvador has become one of the most attractive countries for cryptocurrency companies. Bitfinex recently became the first cryptocurrency exchange to expand into El Salvador, after acquiring a digital asset license that allows it to operate in a regulated manner in the country.
Eliminating taxes on innovative technologies in El Salvador may attract more cryptocurrency and technology companies to the region, which may be beneficial for the country in terms of job creation and economic growth.
In summary, the promulgation of the Law for the Promotion of Technological Innovation and Manufacturing in El Salvador is a great step towards the promotion of the technological industry in the country. Eliminating taxes on innovative technologies and creating incentives for StartUps and technology companies can attract more investment and create more jobs for young people. In addition, this measure can have a positive impact on the cryptocurrency and technology sector in the region, attracting more companies and fostering economic growth. El Salvador is demonstrating a great commitment to innovation and technology, which can consolidate it as a leader in the region in this field.
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