The President of El Salvador, Bukele, has signed it Incentives for innovation and technology for production come into effect law.
In a tweet Posted May 4, President Bukele said the law would eliminate all taxes on technology innovations, including software programming and hardware manufacturing.
“[It] eliminates all taxes (revenue, property, capital gains and import tariffs) on technological innovations, software and app programming, AI, computer and communication hardware production.“
Bukele scraps tax
Details of the law were first made public on March 24 – when President Bukele said he was introducing a bill to Congress to abolish the tax on technological innovations.
There are no updates on the situation until May 4 – as the law has been signed into law.
The term “tech innovations” is believed to encompass Bitcoin, meaning El Salvador is fulfilling its promise to attract Bitcoiners and tech companies to the country.
During an interview last year, Max Keizer explained that El Salvador wants to become the Singapore of Latin America. He said the country had set up an accommodating immigration program to attract digital nomads, innovators and investors.
Tax incentives under the newly signed law suggest the administration is deftly serious about achieving financial hub status.
The US is going the other way
Meanwhile, the US government, led by the Council of Economic Advisers (CEA), has proposed the Digital Asset Mining Energy (DAME) tax.
The agency said a 30% tax on cryptominers is needed to limit the environmental and social damage caused by cryptominers.
“The high energy consumption of cryptominers has negative spillover effects on the environment, quality of life and power grids where these companies are located across the country.”
Dennis Porter, the CEO of the Satoshi Action Fund, denounced the proposal, saying DAME, if adopted, would direct innovation to friendlier jurisdictions, resulting in job losses and economic growth for the US.
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