El Salvador, known for the unprecedented introduction of bitcoin as a legal tender, is now aiming to boost its economic growth by removing all possible taxes that might hinder tech innovation
El Salvador President Nayib Bukele sent a bill of the new Law for the Promotion of Innovation and Manufacturing of Technologies to the national Congress. The 11-page bill presupposes eliminating all income, property, and capital gains taxes on technology innovations.
By abandoning tax requirements, the El Salvador government wants to promote segments “such as software programming, coding, apps and AI development; as well as computing and communications hardware manufacturing.”
The new bill goes along with the further promotion of crypto, particularly, bitcoin in the country. Thus, the country established the National Bitcoin Office of El Salvador, or simply put – the Bitcoin office, a regulatory body for conducting joint initiatives with Bitcoin entrepreneurs and companies.
Since legalisation, El Salvador restrategized Bitcoin investments and utilized capital gains in an effort to rebuild the national economy and fight hyperinflation. The country has passed the Digital Assets Issuance bill which enables ‘volcano bonds’ to pay down foreign debt and unlocks funding for ‘Bitcoin City’ — a metropolis project powered by geothermal energy from the nearby Conchagua volcano.
In addition to financial incentives to the tech industry players, Bukele is trying to reinvent El Salvador by encouraging investment, promoting tourism, countering terrorism and building business hubs in the region. That s supposed to enhance the country’s competitiveness in the global market.
The law will be regulated by El Salvador’s Ministry of Economy and enforced by the Ministry of Finance. The national agencies will see through the improvements of supply chain access, reducing supply chain vulnerabilities for tech innovation and manufacturing, revitalization of the innovation ecosystems, technological manufacturing and its commercialization, etc.
The authorities will have the power to regulate the operation and application of this law, issue Qualification Agreements, carry out inspections to verify compliance with the obligations established in this law, and promote the design and implementation of related public policies.