President Bukele Announces Elimination of Taxes on Technological Innovations.

On March 23rd, President Nayib Bukele announced that he will send a proposal to the Legislative Assembly to eliminate all taxes on technological innovations. This initiative will remove income taxes, property taxes, capital gains taxes, and import tariffs on technology products related to software programming, coding, applications, and the development of artificial intelligence (AI), as well as the manufacturing of computer and communication hardware.

According to Bukele, this measure aims to incentivize investment in science, technology, and innovation, and to attract more companies to the tech industry. The government hopes that by eliminating taxes, more resources will be available for businesses to assume risks and generate their own revenues.

César Addario, Vice President of Exor Latin America, praised the initiative and explained that the tax exemption will provide significant benefits to investors in El Salvador. For instance, for every $100 invested, companies could deduct $30 from their income tax, a remarkable benefit for entrepreneurs.

Addario noted that the exemption applies to investments in new products, services, or process improvements based on research and development, thereby generating new knowledge or improving existing knowledge. He also emphasized that this indirect financing method with tax benefits will contribute to the growth of the industry.

El Salvador’s government aims to modernize the country, attract foreign investments, and close the technological gap in the population. The elimination of taxes on technological innovations is one step towards achieving this goal. The proposal will be reviewed by the Legislative Assembly in the coming weeks.