El Salvador’s President Signs A Bill To Eliminate Taxes On Technological Innovations
El Salvador’s president, Nayib Bukele, is a Bitcoin advocate, and he has signed a measure that does away with taxes on Bitcoin and other forms of technological innovation.
A wide variety of industries are exempt from paying any taxes at all because of the Innovation and Technology Manufacturing Incentive (ITMI) Act.
This new rule has the potential to attract innovation-focused enterprises, which will contribute significantly to the economic growth of the country, even if governments like the United States prefer large tax payments on technical advancements like crypto mining.
On May 4, 2023, President Nayib Bukele announced on Twitter that he had signed new legislation to eliminate all taxes on property, income, capital gains, import tariffs, software and application development, artificial intelligence, and computer and communications gear production.
The ITMI-signed Act has been in the works since at least March 2023, when El Salvador’s president first announced his plans to submit legislation to protect the country’s cutting-edge technology developments.
In accordance with his wishes, legislation was introduced in Congress to do away with taxes on technical advances.
The president of El Salvador has made several attempts to advance his country’s technology infrastructure, and this recently approved bill is just one example.
Forbes India published an article in January 2023 announcing that El Salvador has created a regulatory framework and procedure for the issuance of Bitcoin-backed bonds, popularly known as “Volcano Bonds.”
El Salvador and its industrial, technology, and cryptocurrency businesses may benefit from new legislation signed by President Nayib Bukele this morning. The elimination of taxes in these sectors gives forward-thinking businesses overseas an incentive to relocate to a country with more favorable tax regulations.
The mining of Bitcoin by companies will increase dramatically as a result of Nayib Bukele’s plans to construct a Bitcoin city near the Conchagua volcano in the nation. Hydrothermal energy generated by the volcano will provide all of the power needed for mining operations.
While the United States has lately suggested taxing cryptocurrency mining activities at a rate of 30%, El Salvador is actively encouraging technological innovation.