President Bukele eliminates all taxes on tech innovations
El Salvador's Innovation and Technology Manufacturing Incentives Act is another step towards achieving financial hub status.
El Salvador’s President Bukele has signed the Innovation and Technology Manufacturing Incentives Act into law.
In a tweet posted on May 4, President Bukele said the Act removes all taxation on technology innovations, including software programming and hardware manufacturing.
“[It] eliminates all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing.“
Bukele removes tax
Details of the Act first became public on March 24 – when President Bukele said he was passing a bill to Congress to remove taxation on technological innovations.
There have been no updates on the situation until May 4 – as the Act was signed into law.
The term “technology innovations” is assumed to include Bitcoin, meaning El Salvador is following through with its pledge to attract Bitcoiners and tech companies to the country.
During an interview last year, Max Keiser explained that El Salvador intends to become the Singapore of Latin America. He said the country had created an accommodating immigration program to attract digital nomads, innovators, and investors.
Tax incentives under the newly signed Act suggest the administration is deftly serious about achieving financial hub status.
The U.S. is going the other way
Meanwhile, under the guidance of the Council of Economic Advisers (CEA,)the U.S. administration has proposed the Digital Asset Mining Energy (DAME) tax.
The agency said a 30% tax on crypto miners is needed to limit the environmental and societal damage caused by crypto miners.
“Cryptominers’ high-energy consumption has negative spillovers on the environment, quality of life, and electricity grids where these firms locate across the country.”
Dennis Porter, the CEO of the Satoshi Action Fund, blasted the proposal, saying, if passed, DAME would drive innovation to friendlier jurisdictions – resulting in the loss of jobs and economic growth for the U.S.