El Salvador’s President Nayib Bukele plans to introduce a bill to remove taxes on technology advancements to encourage innovation and increase investment in the sector.

The President made I official in a tweet this week, and he specified that he would be submitting legislation to Congress next week, proposing the removal of all taxes, including income, import tariffs, property, and capital gains, on technological advancements such as app development, AI development, coding, and software programming.

Nayib Bukele Spearheads Technology Adoption in LATAM

On Thursday, President Nayib Bukele of El Salvador stated that he would present a draft law to the nation’s Congress the following week, abolishing taxes on technological advancements and the production of communication and computing hardware.

It is still being determined whether this initiative will encompass BTC applications, despite El Salvador and its leader’s inclination towards bitcoin, as the country established itself as the first nation to accept the cryptocurrency as a legal tender in 2021. Furthermore, at the beginning of 2023, the legislature passed a bill allowing for a bond backed by bitcoin.

The President mentioned that the exemption from taxes would also extend to the production of computing and communication hardware. In addition, the President of El Salvador aims to transform his nation into a cryptocurrency hub, introducing bitcoin as a legal currency in 2021 and constructing the first bitcoin city in the world.

CEO of Binance, Changpeng Zhao, expressed his backing for the plan upon hearing the announcement by President Nayib Bukele. The CEO responded by stating the urge for everyone to do more to promote BTC in El Salvador.

He revealed that the crypto exchange had set up a Customer Support Center in El Salvador with nearly 60 staff members the previous year. The company intends to grow its activities in the region to use the tax benefits proposed in the legislation.

El Salvador Emerges as Largest Cryptocurrency Hub in LATAM

Bukele has stated that this measure is a component of his administration’s wider objectives of establishing El Salvador as a center for technology entrepreneurship and innovation in Central America.

The President has been an outspoken advocate for digital transformation and has implemented initiatives to promote the integration of new technologies in various parts of the economy.

The planned tax reductions are anticipated to positively impact technology startups, small enterprises, and larger corporations intending to increase their presence in El Salvador. Additionally, the initiative may incentivize foreign investment in the country’s technology ecosystem as investors seek locations with favorable tax regulations.

The technology industry stakeholders have responded favorably to the news, with numerous individuals commending the measure as a major stride in establishing a more favorable environment for innovation in El Salvador.

However, it is still being determined whether the proposed legislation will receive sufficient support in the legislative body to be passed. Still, Bukele’s dedication to promoting technological innovation indicates his willingness to take audacious measures to achieve his vision for the nation’s future.

As digital currency gains wider acceptance, governments worldwide face the challenge of regulating this emerging form of asset. One proposed solution that has gained popularity in recent times is the concept of cryptocurrency regulation.

While the United States is currently grappling with imposing stricter regulations on digital currencies, El Salvador is directing its attention toward promoting innovation in technology and cryptocurrency.