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El Salvador Paves the Way for Tech Innovation by Eliminating Taxes

El Salvador President

 El Salvador,  a small country in Central America, has made a significant move again towards fostering an environment of technological innovation. The country's President Nayib Bukele signed a law on April 4 2023 eliminating taxes on technology innovation, a decision that is expected to attract more tech companies to invest in the country and create job opportunities for its citizens.

The bill was sent to Congress by President Bukele in March to eliminate taxes on a variety of innovations in the country's technology sector including: 

  • Technology Innovations 
  • Software and app development 
  • Artificial Intelligence 
  • Computer and Comms hardware manufacturing.
The taxes are to be eliminated on income, property, capital gains, and import tariffs.

El Salvador is the first country to adopt Bitcoin as a legal tender in the world and now eliminating taxes on technology innovation is sending a strong message to the tech community that it is serious about creating a friendly environment for tech startups and entrepreneurs. This move is expected to attract more investment in the country's technology sector and help create jobs for its citizens.

Moreover, this new policy is expected to increase the competitiveness of Salvadorian tech companies in the global market. With reduced costs for importing and selling technology-related goods and services, local tech companies can offer products and services at more competitive prices, making them more attractive to potential customers.

The elimination of taxes on technology innovation in El Salvador is a bold move that demonstrates the government's commitment to creating a favorable environment for tech startups and entrepreneurs. With this policy, the country is poised to become a hub for technology innovation in Central America and beyond. By attracting more investment in the technology sector, El Salvador can create more job opportunities for its citizens and drive economic growth in the years to come. 

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