President Nayib Bukele has officially submitted a legislative proposal aimed at expanding the income tax exemption to cover all monthly salaries up to $550, in a move designed to support working-class families and promote economic equity.
According to the President, the proposed reform will directly benefit over 100,000 Salvadoran families, easing financial burdens and boosting disposable income across the country. The measure is expected to provide greater relief for low- and middle-income earners, especially in the context of global inflation and rising living costs.
“This initiative will serve as a tax incentive to encourage salary increases at the lowest levels,” President Bukele stated. “That includes employees whose current earnings are just above the minimum wage.”
The proposal is now in the hands of the Legislative Assembly, where it will be reviewed and debated in upcoming sessions. If approved, it would mark a significant step toward fiscal reforms aimed at strengthening social welfare and stimulating local consumption in El Salvador.
This tax exemption extension aligns with the government’s broader economic strategy to reduce inequality, increase labor competitiveness, and support sustainable wage growth in the formal economy.