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‘Bitcoin country’ El Salvador scraps tax on technological innovation

'Bitcoin country' El Salvador scraps tax on technological innovation

Striking news from El Salvador, the first country in the world to introduce bitcoin (BTC) as legal tender. President Nayib Bukele has announced that all taxes related to technological innovation will be scrapped. It is part of a major plan to boost the country’s tech sector. It is yet another sign of the greatest ambitions of the small Central American country.

El Salvador is switching

On May 4 Bukele signed the new law: ‘The Innovation and Technological Manufacturing Incentives Act’. In the tweet above, he explained the brand new act:

“(The deed) eliminates all taxes (revenues, profits and import tariffs) on technology innovation, software, app programming, AI, computer and communications hardware manufacturing.”

As you know, President Bukele is a big fan of bitcoin. For example, he made bitcoin legal tender in the Central American country in 2021, and so far that does not seem to be going badly. The new move is in line with Bukele’s ambition to brand El Savador as the “Singapore of Latin America.”

Ambitious plans

The new plan should attract even more investors, developers, bitcoiners and tech companies to the country. Bukele is dead serious about this plan. Only a few years ago, El Salvador, plagued by criminal organizations, was still known as a perilous destination. This reputation seems to be rapidly changing Bukele.

For example, the country has already implemented a special immigration plan to welcome ‘digital nomads’, investors and crypto fanatics. In 2021, it even became possible to obtain a residence permit in the country upon payment of 3 BTC. Later this was adjusted to 100 thousand dollars.

El Salvador is undoubtedly a unique case. Bukele’s unparalleled belief in Bitcoin is admirable. As mentioned, the bitcoin policy in the country is anything but a disaster for the time being. The future will show how ‘bitcoin country’ El Salvador will go down in history, and whether it will actually establish itself as the financial hub of Latin America.

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