Nayib Bukele, the President of El Salvador, confirmed plans to present a bill to the nation’s Congress next week to abolish all taxes on artificial intelligence (AI) development, technology innovation, computing, and communications hardware manufacturing.
In a March 24 tweet, President Bukele declared his intentions by saying that the tax exemption would include property, income, capital gains, and all import tariffs on technology innovations including software programming, coding, and AI development, together with computing and communications hardware manufacturing. He stated:
“Next week, I’ll be sending a bill to congress to eliminate all taxes (income, property, capital gains, and import tariffs) on technology innovations, such as software programming, coding, apps, and AI development; as well as computing and communications hardware manufacturing.”
Next week, I’ll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development; as well as computing and communications hardware manufacturing.
— Nayib Bukele (@nayibbukele) March 24, 2023
The main aim of this bill is to help incentivize the growth of the technology industry in El Salvador and attract some more foreign investment in the space.
This initiative is part of the Bukele administration’s greater efforts to modernize the nation’s economy and help minimize its reliance on traditional industries like manufacturing and agriculture. The government has now been investing in infrastructure, entrepreneurship programs, and education to promote innovation and digitalization across different sectors.
In case the bill is approved, it might make El Salvador a great destination for tech firms and startups seeking to establish a presence in Central America.
Risks Over El Salvador’s Bitcoin Adoption Yet To Materialize
In the wake of recent challenging years, President Bukele has managed to establish El Salvador as a crypto hub. In 2021, this Central American country became the first nation to adopt bitcoin as a legal tender to enhance financial inclusion and make it significantly easy for Salvadorans living abroad to send money back home while minimizing reliance on the US dollar.
Interestingly, the move came under fire from the International Monetary Fund (IMF) as the institution continued to raise doubts about the viability of El Salvador’s adoption of Bitcoin. Nevertheless, in February 2023, IMF admitted that the risks over El Salvador’s adoption of Bitcoin ‘have not materialized’, as previously reported by Finbold.
Since adopting Bitcoin, El Salvador has been striving to establish itself as a major player in the crypto space. The nation has managed to attract lots of attention from the crypto community, with many high-profile figures having already visited El Salvador to learn more information about its plans for Bitcoin in the coming years.
Buy Bitcoin NowDespite some initial doubts and criticism, El Salvador’s decision to adopt Bitcoin has been praised by many proponents as a strong and innovative step that may pave the way for other nations to follow suit. The failure or success of this experiment will be keenly monitored by the rest of the world, as the role of cryptos in the global economy keeps evolving.
