El Salvador President Readies Bill To Eliminate Taxes On Tech

An anonymous reader quotes a report from Reuters: El Salvador's President Nayib Bukele said on Thursday he will send to the country's Congress next week a bill to eliminate all taxes on technology innovations as well as computing and communications hardware manufacturing. "Next week, I'll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development," he said on Twitter. The tax cut would also encompass computing and communications hardware manufacturing, Bukele added. In 2021, the Salvadoran leader introduced legislation to make El Salvador the world's first sovereign nation to adopt bitcoin as legal tender. He also unveiled plans to build a "Bitcoin City" at the base of a volcano.

This should be good.

[fuzzyfuzzyfungus]

Given that you can smear a thin veneer of 'tech' over just about anything(along with exaggerating the coolness of the boring-but-technically-'tech' stuff that often doesn't even get thought of as 'tech' anymore; like the fact that even small business correspondence is probably full of mail merge); this seems virtually certain to be vulnerable to hilarious exploits.

Why not eliminate your property taxes by installing some $5 microcontrollers and turning your boring home or business into an 'IoT innovation center'?

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[Inglix the Mad]

They're just quadrupling down because to do anything else could cause serious issues with people/government.

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[Anonymous Coward]

The guy in charge is obviously a bit of a nut, but actually, many countries have some sort of "R&D tax relief", usually centred around whatever sort of innovation they want (eg. "fin tech", "bio tech" or whatever).

The UK has such a scheme, which has lead to the bizarre situation of our national tax collector (HMRC) having to somehow assess if a company's R&D is actually "innovative" or not. Seeing as HMRC is barely qualified to collect and count tax money, to ask them to make assessments like this i

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[Spazmania]

The thing tech companies like more than low taxes is a stable and well policed system of law so that their investment doesn't go up in smoke at someone's whim.

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[account_deleted]

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Vulcans

[DriveDog]

"...build a 'Bitcoin City' at the base of a volcano."

Sounds appropriate.

Re:Vulcans and Tom Cruise

[Seven Spirals]

Xenu is the mayor.

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[dsgrntlxmply]

Live short and perspire.

unequal application of law and unintended conseque

[roman_mir]

Obviously eliminating income, dividend, capital gains and hopefully inheritance and gift taxes is the right thing for the economy and morality, however what is this 'tech' thing? This sounds like the law will treat people differently depending on their chosen profession. First of all this is simply wrong on the equality argument, secondly the consequences will be that all businesses will attempt to reclassify themselves as 'tech' and 'AI'. Waiting for the development of AI in the dish washing and burger

Re: unequal application of law and unintended cons

[Mass Overkiller]

With the reduced cost of not paying taxes, those AI powered burger flipping companies will certainly pass those tax savings on to their customers in the form of lower prices? lol

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[hdyoung]

El Salvador? Transition to a tech economy? Their GDP per capita is under 5000. At that level of economic development, huge chunks of their population don't even have electricity, running water, toilets and sewer, access to medicine when they need it, etc. etc. Bukele is obviously living in a presidential palace and spending waaayyy too much time on Tik Tok. He thinks his country is like Miami.

And the idea that an El Salvador company could transition to "tech"? That requires things like "roads" and "ele

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[roman_mir]

I don't think you read me right, I am not saying that the companies will be developing tech or working in technology, I am saying that with these types of tax incentives all companies will find ways to reclassify as tech companies. For a tech guy, you are not very bright, are you? Well, that's the same issue with government officials too, they don't really understand things that are obvious, that will happen as a response to their actions.

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[hdyoung]

Oh. Haha. Yeah agreed on that one. Though most of the economy in a country like that is informal and under-the-radar. The few businesses actually in the governments view will all be “tech compaines” before the next tax bill comes due.

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[account_deleted]

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I forsee...

[MBC1977]

Couple of interesting scenarios will probably occur here:

(1) Bunch of tech companies headquarters are gonna move (though I wonder if will consider the corruption and cartels down there).

(2) Starbucks will arrive with new tropical flavors.

(3) Housing is gonna skyrocket.

I'm sure there are more, but I don't have enough coffee in me yet to consider anymore.

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[drinkypoo]

(1) Bunch of tech companies headquarters are gonna move (though I wonder if will consider the corruption and cartels down there).

The "HQ" is gonna be one guy in an office with a phone and a filing cabinet.

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[account_deleted]

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[drhamad]

I foresee literally none of that.

Worth a try when you don't have much to lose?

[iamacat]

What's the worst that can happen? Laws abused for tax evasion? Well, this still gets money and rich people who spend money into the country. In the meantime, even in poor countries there are individuals who are both talented and fond of where they grew up. This makes it a little easier for them to stay and make a living.

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[account_deleted]

Comment removed based on user account deletion

Corp. Movement

[Hodr]

In unrelated news Microsoft, Meta, and Google each announced they would be moving their corporate headquarters to El Salvador which naturally serves as a more centralized location to better meet the needs of their customers throughout the Americas.