El Salvador's President Nayib Bukele plans to eliminate all taxes related to technological innovation, including income tax, property tax, capital gains tax, and import duties. This move is expected to be popular among many young companies looking to save on their capital.
Nayib Bukele is leading El Salvador towards technological innovation
Bukele continues to push El Salvador towards technological innovation. Known for making Bitcoin (BTC) legal tender in the small Central American country, Bukele announced that he will send a bill to Congress to eliminate all taxes related to technological innovation.
According to the Salvadoran President's tweet, this would include income tax, property tax, capital gains tax, as well as import duties. While he did not mention cryptocurrencies in his statement, the term technological innovation is expected to encompass artificial intelligence (AI), programming, computer coding, as well as the manufacture of hardware and communication equipment.
The initiative has received praise from Changpeng Zhao, the CEO of cryptocurrency exchange Binance.
Many entrepreneurs are likely to appreciate this initiative, as it provides a favorable financial environment for young companies that often need to save their capital. This is especially true considering the phenomenal momentum that artificial intelligence has gained since the launch of ChatGPT.
Furthermore, while the Salvador has long been relegated to a secondary destination due to its high crime rates, Nayib Bukele has launched a major offensive against organized crime, which has earned him headlines in recent weeks, particularly due to the construction of a "mega-prison" to imprison gang members.
The homicide rate has been drastically reduced, from 103 per 100,000 inhabitants in 2015 to 7.8 in 2022, the lowest rate ever recorded in the history of El Salvador. The President was initially elected for his security policy, which seems to have paid off.
Only time will tell if the new measures that Nayib Bukele wants to implement to attract young talent, combined with the reduction in crime, will bring in new investors.
