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President of El Salvador readies bill to remove taxes on AI and tech innovations

President of El Salvador readies bill to remove taxes on AI and tech innovations

Nayib Bukele, the President of El Salvador, announced plans to present a bill to the country’s Congress next week that would abolish all taxes on technology innovation, artificial intelligence (AI) development, computing, and communications hardware manufacturing.

In a tweet on March 24, Bukele declared his intentions by stating that the tax exemption would include income, property, capital gains, and import tariffs on technology innovations such as coding, software programming, AI development, as well as computing and communications hardware manufacturing. He said:

“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.”

The goal of the bill is to incentivize the growth of the technology sector in El Salvador and attract more foreign investment in the field.

This initiative is part of the Bukele administration’s broader efforts to modernize the country’s economy and reduce its reliance on traditional industries like agriculture and manufacturing. The government has been investing in infrastructure, education, and entrepreneurship programs to promote innovation and digitalization across various sectors.

If the bill is approved, it could make El Salvador an attractive destination for tech companies and startups looking to establish a presence in Central America.

The risks over El Salvador’s embrace of Bitcoin ‘have not materialized’

In the face of challenging recent years, Bukele continues to establish El Salvador as a cryptocurrency hub. In 2021, the Central American nation became the first country to adopt bitcoin as a legal tender to boost financial inclusion and make it easier for Salvadorans living abroad to send money back home, while also reducing reliance on the US dollar.

Notably, the move came under fire from the International Monetary Fund (IMF) as the institution continued questioning the viability of El Salvador’s adoption of Bitcoin. However, in February of 2023, the major financial agency admitted that the risks over El Salvador’s embrace of Bitcoin ‘have not materialized’, as previously reported by Finbold.

Since the adoption of Bitcoin, El Salvador has been working to establish itself as a leading player in the cryptocurrency space. The country has attracted significant attention from the crypto community, with several high-profile figures visiting El Salvador to learn more about its plans for Bitcoin.

Despite some initial skepticism and criticism, El Salvador’s move to embrace Bitcoin has been hailed by many as a bold and innovative step that could pave the way for other countries to follow suit. The success or failure of this experiment will be closely watched by the rest of the world, as the role of cryptocurrencies in the global economy continues to evolve.

Featured Image via Sky News YouTube

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