President Nayib Bukele has sent a new proposal to the Legislative Assembly to increase the income-tax exemption threshold from $472 to $550 per month, a move expected to directly benefit over 100,000 Salvadoran families.

The initiative is part of a broader economic strategy to boost family income and relieve financial pressure amid rising living costs. Announced through President Bukele’s official account on X, the measure aligns with the government’s plan to raise the minimum wage by 12% starting in June 2025 across sectors including maquila, industry, agriculture, commerce, and services.

“This measure will directly benefit more than 100,000 Salvadoran families,” Bukele posted, adding that the reform would also positively impact workers earning just above the minimum wage.

Currently, under the existing Income Tax Law, individuals earning up to $472 are exempt from tax withholdings. The proposed reform would increase this threshold to $550, adjusting the minimum withholding to $78 for incomes above that amount. If approved with a waiver of legislative processing time, the new policy could be enacted in the coming days.

The Director General of Internal Revenue, Marvin Sorto, reminded taxpayers that the legal deadline for filing returns remains in effect for those earning $472.01 or more.

This tax proposal complements other economic relief measures promoted under the first phase of the government’s 2024–2029 Economic Plan. Launched in June 2024, the “Food Plan” introduced low-cost agricultural markets and a central supply hub in Soyapango to reduce the cost of basic food items. In addition, the government continues subsidies for liquefied petroleum gas and electricity to support Salvadoran households.

As the Bukele administration moves to expand disposable income and strengthen consumer power, the income-tax reform represents a key step toward economic resilience and social equity in El Salvador.