Bitcoin Country El Salvador’s new bill offers tax breaks for tech innovation
The popular crypto-friendly country of El Salvador has taken a big step to improve economic growth via technology. It recently overhauled the tax system that exempts technology innovations to boost development.
Remember that El Salvador was the first country to make bitcoin legal tender and pushed for more adoption. This latest move is expected to attract more developers to the country, given that it has become a tax haven for them.
El Salvador offers tax exemptions for technical developers
President Nayib Bukele sent the bill to Congress on April 1. The tax exemption in El Salvador covers developers in app coding and AI development, software programming, communication hardware manufacturing and computing. It eliminates all import tariffs, income gains and property taxes from these sectors.
Furthermore, Bukele outlined reasons for the tax exemption as acceleration of production and innovation, for example semiconductors and microelectronic components. The law also aims to make El Salvador a leader in advanced technology production in Latin America.
Furthermore, the President aims to encourage, diversify and expand Salvadoran human talent towards technology production. He also wants to increase education and training in advanced technological production.
The President also established a National Bitcoin Office (ONBTC) to support this recent move. The regulatory body will work hand in hand with bitcoin companies and entrepreneurs in the country.
In a Twitter postsONBTC announced that it would help position El Salvador as a technological and economic power throughout the world.
In particular, President Bukele had promised to pursue this decision on 24 March. He did it announcement on Twitter, leading to positive answer so many users saw it as a step towards pushing the country’s tech industry.
El Salvador’s economic development skyrocketed after BTC legalization
Bukele had been a driving force driving El Salvador’s economic development. The president surprised the world when he legalized Bitcoin as a means of payment in the country.
Move on 17 September 2021 attracted much criticism. Still, in November 2021, the country inaugurated a bitcoin city backed by $1 billion BTC bonds to be a home for “everything around Bitcoin.”
Bukele has continued to push adoption to date and has even established the Bitcoin Association of El Salvador to pursue the initiative further.
Notably, after legalizing BTC, El Salvador’s tourism skyrocketed by 30%. Tourism Minister Morena Valdez revealed the growth below an interview with a local news agency. She stated that before making BTC legal tender, El Salvador only saw tourists from neighboring countries.
But following the legalization of bitcoin, 60% of the country’s tourists are now from the United States, boosting its foreign exchange earnings to $1.4 million beyond the projected $800,000. El Salvador also saw a boost in exports as it grew by 13% in January 2022, beyond the 10.3% recorded in January 2021.
Featured image from NRP and chart from Tradingview.com
