Salvadoran president removes tax on tech innovations

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Nayib Bukele, president of El Salvador and supporter of Bitcoin, recently signed a law that removes taxation of technological innovations in the country. The Technology Manufacturing and Innovation Incentives (ITMI) Act has revealed a wide range of sectors where full tax removal applies.

While countries like the US administration want high taxes on technological innovations such as cryptocurrency mining, this new law could go a long way in attracting innovation-driven companies, which will bring development to the nation.

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I have just signed into law the INNOVATION AND TECHNOLOGY MANUFACTURING INCENTIVES ACT, which eliminates all taxes (income, property, capital gains and import duties) on technological innovations, software and application programming, AI, the manufacture of computer and communication equipment. pic.twitter.com/rZtGzPgVzW

Nayib Bukele (@nayibbukele) May 4, 2023

El Salvador pushes for technological innovation by eliminating taxes

Nayib Bukele took to his official Twitter account on May 4, 2023 to say that he had signed the new law ensuring that taxes on property, income, capital gains, import duties, software programming and d ‘applications, AI, manufacture of computer and communication equipment are completely removed in the future.

The law signed ITMI has been in the works since March 2023, when the Salvadoran president made clear his intention to introduce a bill aimed at protecting innovative technological advances in the country.

Following his intentions, legislation was passed to Congress to eliminate the taxation of technological innovations in the country.

This recently signed law is just one of many efforts made by the Salvadoran President for the technological growth and development of the country.

In January 2023, a report by Forbes India announced that El Salvador had established a legal framework and process for issuing Bitcoin-backed bonds, also known as volcanic bonds.

El Salvador’s Bitcoin-backed bond was advanced for sovereign debt payments, developing Bitcoin mining infrastructure by funding the construction of a project dubbed Bitcoin City to scale up sustainable crypto-mining efforts.

A welcoming nation for innovative tech and crypto-mining companies?

The law signed by Nayib Bukele earlier today could help the growth and technological development of El Salvador as a nation and for the manufacturing, technology and crypto companies operating in the country. With the non-taxation law applicable to the aforementioned sectors, innovative companies abroad are encouraged to transfer their activities to a country with positive tax legislation.

Nayib Bukeles’ efforts to build a Bitcoincity near Conchagua Volcano in the country will exponentially increase BTC mining activities by companies. The energy needed for mining will come directly from the volcano, which generates hydrothermal energy.

While the United States recently proposed a 30% tax on crypto-mining operations, El Salvador continues to foster a thriving tech innovation ecosystem.

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