In March of this year, a bill was announced in El Salvador, and today it was signed into law by President Nayib Bukele. The new legislation abolishes taxes on technology innovations and includes additional measures such as the elimination of income, property, capital gains, and tariffs that are crucial to promoting technological advancement under the Innovation and Technology Manufacturing Incentive Act.
This announcement strengthens El Salvador’s position as a destination for technology development. Furthermore, President Bukele emphasized that the newly enacted law safeguards “technology innovations, software and app programming, AI, computer, and communications hardware manufacturing.”
Back in March, President Bukele revealed his plan to propose a bill aimed at safeguarding technological progress in El Salvador. The bill was then forwarded to Congress to remove taxes on a range of technology-related advancements.
The El Salvadoran president has recently signed into law the complete elimination of taxes on technology innovations. President Bukele also confirmed the news via Twitter, notifying the public that the bill had been successfully enacted.
The Innovations and Technology Manufacturing Incentives Act is expected to entice technology developments to El Salvador, while the tax elimination is economically advantageous for many companies. Conversely, the country’s dedication to a diverse range of tech innovations being cultivated remains unwavering.
The growth of certain technological advancements, such as generative AI and bitcoin, has been hindered by unclear regulations. The recent Digital Asset Mining Energy (DAME) excise tax introduced by the U.S. government is a clear example of such prohibitive regulations.
El Salvador has responded to this issue by taking swift action and implementing an alternative environment through its new law.
