The President of El Salvador, Nayib Bukele, wants to abolish all taxes related to technological innovation. This proposal concerns, inter alia, income taxes, property taxes, capital gains taxes and import duties. An initiative that should probably appeal to many young companies wishing to save their capital.
Nayib Bukele embarks El Salvador in technological innovation
The President of El Salvador, Nayib Bukele, continues to show its attraction to new technologies. Known for having made Bitcoin (BTC) legal tender in El Salvador, this small Central American country, Nayib Bukele has announced that he will send a bill to Congress in order to abolish all taxes relating to technological innovation.
Next week, I’ll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development; as well as computing and communications hardware manufacturing.
—Nayib Bukele (@nayibbukele) March 24, 2023
According to the Salvadoran president’s tweet, this will concern income taxes, property taxes, but also capital gains taxes and import duties. Although he did not mention cryptocurrencies in his statementthe term technological innovation should however encompass artificial intelligence (AI), programming, computer coding or even the manufacture of computer and communication equipment.
The initiative was particularly welcomed by Changpeng Zhaothe CEO of cryptocurrency exchange Binance.
— CZ 🔶 Binance (@cz_binance) March 24, 2023
An initiative that should be appreciated by a large number of entrepreneurs, such light financial conditions constituting fertile ground for young companies which sometimes have to save their capital. And all the more so when you consider the phenomenal momentum that artificial intelligence has experienced since the launch of ChatGPT.
Moreover, while El Salvador has long been a destination rather relegated to second place because of the crime that is rampant there, Nayib Bukele launched a major offensive against organized crimewhich has earned him headlines in recent weeks, particularly because of the “mega-prison” built in the country to lock up gang members.
The homicide rate has thus been drastically reduced, falling from 103 per 100,000 inhabitants in 2015 to 7.8 in 2022, the lowest rate ever recorded in the history of El Salvador. The President was initially elected on his security policy, which seems to have paid off.
Time will tell if the new measures that Nayib Bukele wants to put in place to attract young talent, combined with the drop in crime, will bring in new investors.
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