The Legislative Assembly of El Salvador has unanimously passed a measure to completely eliminate the income tax on foreign investments and remittances, reducing it from 30% to 0% with no restrictions on the amount. President Nayib Bukele announced this development on the X social media platform in a post on March 12. The measure received 69 votes in favor out of a total of 84, according to the Asamblea Legislativa’s post on X.
Since Bukele’s election in 2019, El Salvador has undergone significant transformation. In 2021, Bukele declared Bitcoin (BTC) as legal tender in the country and acquired 200 BTC for its reserves. Consequently, the country’s economy has experienced consistent growth. According to the World Data Bank, El Salvador’s gross domestic product was $24.9 billion in 2019 and rose to $32.4 billion by 2022. Estimates also predict a 2.8% growth for 2023.
Furthermore, El Salvador’s purchase of Bitcoin in 2021 has resulted in a profit of $85 million, following BTC’s surge above the $72,000 mark during the week of March 10, as reported by Cointelegraph. Bukele was reelected on February 4, garnering an impressive 85% or more of the votes.
This recent amendment to the tax code follows El Salvador’s previous decision to eliminate all taxes associated with technological advancements in April 2023. As previously reported by Cointelegraph, the country passed a bill to abolish income, property, and capital gains taxes on technology innovations, including software programming, coding, app development, AI development, as well as computing and communications hardware manufacturing.