El Salvador President Nayib Bukele has officially signed a law eliminating taxes on technology innovations.
The new Innovation and Technology Manufacturing Incentive Act will eliminate taxes on income, property, capital gains, and important tariffs for technology innovations.
President Bukele announced the historic moment on Twitter, generating thousands of reactions within the first hour.
I’ve just signed into law, the INNOVATION AND TECHNOLOGY MANUFACTURING INCENTIVES ACT, that eliminates all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing. pic.twitter.com/rZtGzPgVzW
— Nayib Bukele (@nayibbukele) May 4, 2023
The announcement reinforces El Salvador’s perspective as a haven for technology development. Back in 2021 El Salvador made headlines by being the first country to make Bitcoin legal tender. The announcement came just before Bitcoin peaked at 65,000 USD for one coin, before dropping back below $20,000 just months after.
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El Salvador Eliminates Tax on Tech Innovations
In March, President Bukele announced his intention to introduce a bill protecting and encouraging technological advancements in the country. The bill was then sent to Congress to approve eliminating taxes on a variety of innovations in the tech sector.
As of yesterday, the El Salvador president has officially signed a law eliminating all taxes on technology innovations.
This new act will likely attract tech developments to the country, as developers and businesses will be able to capitalise on the tax break. This could mean more tech companies decide to move HQs and other big offices to El Salvador.