El Salvador Boosts Tech Innovations with Tax Exemption

• El Salvador president Nayib Bukele has signed a law eliminating taxation on technological innovations, such as cryptocurrency mining, in the country.
• The Innovation and Technology Manufacturing Incentive (ITMI) Act is aimed at attracting innovative businesses to the nation, which will bring development.
• Earlier this year, El Salvador announced the introduction of Bitcoin-backed bonds to fund sovereign debt payments and develop its Bitcoin mining infrastructure.

El Salvador Removes Taxation On Technological Innovations

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.

Benefits Of ITMI Act

Nayib Bukele took to his official Twitter handle on May 4th 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 since March 2023 when El Salvador’s president made clear his intentions to introduce a bill to safeguard innovative technological advancements in the country.

El Salvador’s Push For Tech Innovation

In January 2023 an Indian report carried news that El Salvador had established a legal framework and process for issuing Bitcoin-backed bonds or “Volcano Bonds” for sovereign debt payments. Additionally they have also started developing their Bitcoin mining infrastructure by funding the construction of a project dubbed “Bitcoin City” for sustainable crypto-mining efforts.

A Welcoming Nation For Innovative Tech Companies?

The recently signed legislation by Nayib Bukele could foster growth and technological development of El Salvador as a nation while manufacturing tech companies benefit from no taxes imposed upon them anymore. This could be just one step towards positioning El Salvador as an attractive destination for technology companies looking to invest in innovative projects within Latin America’s borders.


With no taxes imposed upon tech companies anymore it remains yet unclear how exactly this will impact El Salvadors economy but it is definitely one step towards positioning El Salvadors economy into being more attractive for investors looking into Latin America’s markets with some kind of stability already provided by Nayib Bukeles presidency during these last few years

El Salvador Boosts Tech Innovations with Tax Exemption
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