Nayib Bukele, president of El Salvador and a Bitcoin supporter, has recently signed a law that removes taxation on technological innovations in the country. The Innovation and Technology Manufacturing Incentive (ITMI) Act revealed a broad spectrum of sectors where complete tax removal applies.
While countries such as the US administration wants high tax payments on technological innovations such as cryptocurrency mining, this new law could go far in attracting innovation-focused companies, which will bring development to the nation.
I’ve just signed into law, the INNOVATION AND TECHNOLOGY MANUFACTURING INCENTIVES ACT, that eliminates all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing. pic.twitter.com/rZtGzPgVzW
— Nayib Bukele (@nayibbukele) May 4, 2023
El Salvador Pushes For Tech Innovation By Removing Taxes
Nayib Bukele took to his official Twitter handle on May 4, 2023, to say that he signed the new law to ensure that taxes on property, income, capital gains, import tariffs, software and application programming, AI, computer and communications hardware manufacturing are totally removed going forward.
The ITMI signed Act has been in the works, as earlier as March 2023, when the El Salvador president made clear his intentions to introduce a bill to safeguard innovative technological advancements in the country.
Following his intentions, legislation was forwarded to Congress to eliminate taxation on technological innovations in the country.
This newly signed law is just one among the many efforts the El Salvadorian president has pushed for the technological growth and development of the country.
In January 2023, a Forbes India report carried the news that stated that El Salvador had established a legal framework and process for issuing Bitcoin-backed bonds, also known as “Volcano Bonds.”
El Salvador’s Bitcoin-backed bond was pushed forward for sovereign debt payments, developing a Bitcoin mining infrastructure by funding the construction of a project dubbed Bitcoin City to scale sustainable crypto-mining efforts.
A Welcoming Nation For Innovative Tech And Crypto Mining Firms?
The law signed by Nayib Bukele earlier today could foster the growth and technological development of El Salvador as a nation and for manufacturing, tech, and crypto companies operating in the country. With the no-tax law applicable to the earlier-mentioned sectors, innovative companies abroad are provided with the incentive to shift operations to a country with a positive tax law.
Nayib Bukele’s efforts to build a Bitcoin city near the Conchagua volcano in the country will exponentially scale BTC mining activities by corporations. The energy required for mining will be sourced directly from the volcano, which generates hydrothermal energy.
While the US has recently proposed a 30 percent tax on crypto mining operations, El Salvador continues promoting a thriving technological innovation ecosystem.