Salvadoran lawmakers pass tech tax cut, including for AI businesses
Last updated on: 19 April,2023 10:39 am
Bukele's New Ideas Party dominates the country's Congress.
SAN SALVADOR (Reuters) - El Salvador's ruling party lawmakers approved late Tuesday a bill to eliminate for 15 years taxes on companies developing artificial intelligence (AI) and other computer programming work in a bid to make the country a more attractive tech destination.
The tech tax cut was championed by President Nayib Bukele, who first touted the legislation late last month.
Bukele's New Ideas Party dominates the country's Congress.
The bill exempts eligible companies from income tax, capital gains and local government taxes, as well as tariff payments on imported goods that technology businesses need.
Lawmakers approved it with 69 voting in favor among the 84-member unicameral legislature.
"With these exemptions, we are facilitating the development of the technological sector in our country, and manufacturing as well, which will help a new industry emerge," said New Ideas lawmaker Rodrigo Ayala during the debate.
The new tax incentives for the nascent tech sector are only the latest efforts by Bukele and his allies to re-brand the Central American country as an emerging hub for innovation.
In 2021, El Salvador made waves as the first nation to adopt the cryptocurrency bitcoin as legal tender, alongside the U.S. dollar.