El Salvador President Readies Bill To Eliminate Taxes On Tech (reuters.com) 24
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. (Score:3)
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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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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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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As long as it enforces the "innovation" requirement that means it can still tax 99.9999% of everything "tech". Ie, his love buddy bitcoin and bitcoin apps still get taxed, as does IT services, software programming, social media, etc. Mostly he's a corrupt leader, he wants less tax for himself and his buddies, and this law won't affect any actual workers or farmers.
Vulcans (Score:5, Funny)
"...build a 'Bitcoin City' at the base of a volcano."
Sounds appropriate.
Re:Vulcans and Tom Cruise (Score:1)
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unequal application of law and unintended conseque (Score:1)
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 (Score:2)
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And the idea that an El Salvador company could transition to "tech"? That requires things like "roads" and "ele
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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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Right, it's tax the workers without tech and leave those who only superficially with tech untaxed. That;s the first glance though.
My guess, which may be wrong, is that workers get taxed (as long as not related to a government official) but the employers are not. Otherwise any increase in industry with no increase in tax revenue could be a net loss to the country. Is he hoping for an El Savadoran workforce in those untaxed manufacturing facilities?
I forsee... (Score:2)
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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(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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Hmm, Caribbean style shell company. Only with some "tech" branding. Of course, lessons learned and all, don't keep too much actual money in El Salvador, just get it in and out fast so that it's laundered.
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Worth a try when you don't have much to lose? (Score:2)
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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He never thought it was going to save his country. That's just what he says to the public. It's a scam. Flip a bitcoin and if it comes up heads it's a scam. Siphon off some money from the citizens, but mostly for hiding his own money that he's stealing.
Corp. Movement (Score:2)
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.