Nayib Bukele wants to make El Salvador a new home for crypto and IT start-ups
Salvadoran President Nayib Bukele has announced his intention to present a bill to the national congress next week to eliminate all taxes on technological innovations. The bill will target income, property, capital gains and import tariffs associated with software programming, coding, applications, artificial intelligence development and manufacturing of computer hardware and communication.
Bukele’s move to create a more tech-friendly environment is expected to attract more international investment and boost the country’s growing tech sector.
In response to Bukele’s announcement, Binance CEO Changpeng Zhao expressed support for the initiative, noting that the cryptocurrency exchange had already established a customer support center in El Salvador last year. employing around 60 people. Zhao said, “Let’s do more! indicating the company’s intention to expand its operations in the country, taking advantage of the tax incentives offered by the bill.
Next week, I will send a bill to Congress to eliminate all taxes (on income, property, capital gains and import duties) on technological innovations, such as software programming, coding , AI applications and development; as well as the manufacture of computer and communication equipment.
—Nayib Bukele (@nayibbukele) March 24, 2023
El Salvador has actively embraced technology and digital assets, including becoming the first country to adopt Bitcoin as legal tender in September 2021.
Despite the ambitious move, the country’s investment in Bitcoin has yet to pay off, with the value of its portfolio still down 34% to $73 million, a drop of almost $38 million. The volatile nature of the cryptocurrency market has contributed to this decline, but Bukele remains committed to promoting and investing in technology and digital assets as a way to boost the economy and boost the country’s development.
The proposed tax elimination bill is expected to create a more favorable environment for technology companies, attracting more international investment and fostering innovation in various technology sectors. This could potentially lead to job creation and economic growth, as well as placing El Salvador at the forefront of technological progress in the region.