As some countries like the United States continue to restrict innovative technologies like Bitcoin and cryptocurrencies, other Latin American countries, such as El Salvador, are working to boost the growth of their tech industries.
On May 4th, Nayib Bukele, President of El Salvador, announced the enactment of a law that eliminates taxes on innovative technologies, including software creation, coding, artificial intelligence, and other fields.
The law signed by Bukele will exempt fiscal taxes on these technologies for at least 15 years. Additionally, it includes the elimination of capital gains tax, paid when obtaining profits from the sale of an asset.
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
El Salvador wants to become a technological leader in Latin America
The bill was approved on April 19th by the Legislative Assembly of El Salvador with 69 votes in favor and none against during the 103rd plenary session of the legislative body.
Congresswoman Elisa Rosales stated during the plenary session that the new Legislative Assembly and the Executive Branch are working to position the country as a leader in Latin America on technological manufacturing.
“There are five incentives being granted for 15 years, and we are not establishing a minimum investment amount because we want to encourage all those StartUps. We have a different vision; we are positioning our country with a different face internationally,”
El Salvador bets on emerging technologies to improve its economy
Congressman Estuardo Rodríguez pointed out that the Law for the Promotion of Innovation and Technological Manufacturing will “contribute significantly to the country’s economic development,” creating more jobs for young people.
Furthermore, the new law will create opportunities for the development of artificial intelligence, a cutting-edge technology used daily by millions of users and companies to improve their efficiency and productivity.
Thanks to Nayib Bukele’s technological proposals, such as enacting the Bitcoin Law, which establishes the use of Bitcoin as legal tender in El Salvador, the country has become one of the most attractive nations for cryptocurrency companies.
As recently reported by ZyCrypto, Bitfinex became the first cryptocurrency exchange to expand to El Salvador after acquiring a digital asset license allowing it to operate in a regulated manner in the country. Will other major exchanges follow?