El Salvador president to introduce tax exemption for innovation


Tax exemption bill for technological innovation

El Salvador’s President Najib Bukele said on Wednesday that he plans to introduce a bill to eliminate all taxes on software and hardware innovations.

President Bukele tweeted:

I will send a bill to Congress next week to eliminate all taxes (income, property, capital gains, import duties) on innovations such as software programming, coding, apps, AI development, and computing and telecommunications hardware manufacturing. It’s planned.

Details such as whether crypto assets (virtual currencies) such as Bitcoin (BTC) are included in the target technological innovations have not yet been revealed.

Under the leadership of President Bukele, El Salvador passed a bill to make Bitcoin legal tender in June 2021. Since then, it has shown various policies to utilize Bitcoin.

What is Bitcoin Law in El Salvador

Alongside the US dollar, it recognizes bitcoin as legal tender and stipulates that citizens can use bitcoin for all payment scenarios. The bill, promoted by President Bukele of El Salvador, was passed by Congress on June 9, 2021. It was the first time that Bitcoin was officially recognized as a national legal tender.

▶Cryptocurrency Glossary

Developer training program “CUBO+”

In a recent case, President Najib’s Bitcoin Office today announced CUBO+, a Bitcoin and Lightning Network developer training program.

The Bitcoin Office describes the inaugural program as “offering El Salvador’s brightest computer science students the opportunity to learn from some of the biggest names in the Bitcoin industry.” This course is for Plan ₿ Fellowship scholars.

The first will be in collaboration with the University of Don Bosco, located in the Soyapango area, which has recently been freed from gang control. President Bukele is gaining public support for his crackdown on gangs in the country. In March 2022, they conducted a thorough operation in Soyapango, ultimately arresting 64,000 people.

The Bitcoin Office says it will expand the program over the next few years to include other universities and high schools across El Salvador. He added that El Salvador will become “his outsourcing hub for open source, peer-to-peer, Bitcoin, Lightning Network and other startups” within a few years.

“Plan ₿” is a joint project between the US company Tether and the city of Lugano in Switzerland. It aims to promote the adoption of Bitcoin. The city of Lugano already allows payments in Bitcoin and Tether’s stablecoin USDT at more than 150 merchants in the city.

connection: McDonald’s Starts Cryptocurrency Payment Tether and Lugano City in Switzerland Collaborate

What is Lightning Network

An off-chain technology that uses Layer 2 to eliminate the transaction processing capacity of Bitcoin. By introducing the Lightning Network, transactions can be conducted outside the blockchain, which tends to be congested, leading to faster transactions and lower fees. If transactions are made faster and fees are reduced, it will be possible to make small payments, which is expected to lead to the creation of new products and services.

▶Cryptocurrency Glossary

IMF critical

In January, El Salvador passed a “digital securities law” that included rules that would allow the government to issue Bitcoin-backed bonds. In November 2022, President Bukele declared that the country’s Ministry of Finance would buy 1 BTC of Bitcoin every day.

The International Monetary Fund (IMF), meanwhile, has expressed concerns over the move, with a February report calling for El Salvador to review its expansion of Bitcoin adoption, including a “Bitcoin bond” it is preparing to issue. . It lists the risks Bitcoin poses to finance, financial stability and consumer protection.

connection: International Monetary Fund (IMF) research report “El Salvador should review the introduction of Bitcoin bonds”

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