El Salvador, the first country to establish Bitcoin (BTC) as a legal tender, has decided to eliminate all taxes on technology innovations. The move runs parallel to establishing the National Bitcoin Office (ONBTC) of El Salvador, also known as “the Bitcoin office.“
When legalizing Bitcoin on Sept. 7, 2021, Salvadoran President Nayib Bukele saw the technology as a means to counter hyperinflation and dependence on the U.S. dollar. Over the past 18 months, El Salvador restrategized Bitcoin investments and utilized capital gains in numerous instances to rebuild the nation.
Moving ahead with the strategy, Bukele believed in winding down tax requirements to expedite technological development. As promised, on April 1, Bukele officially sent a bill to Congress — effectively eliminating all income, property, and capital gains taxes on technology innovations “such as software programming, coding, apps and AI development, as well as computing and communications hardware manufacturing.”
Supporting this initiative is the establishment of the Bitcoin office, a regulatory body for conducting joint initiatives with Bitcoin entrepreneurs and companies. According to Asociación Bitcoin de El Salvador (Bitcoin Association of El Salvador), ONBTC aims to “position the country in the world as a technological and economic power.”
Ayer tuvimos una reunión muy especial con la @bitcoinofficesv
Las empresas de #Bitcoin y los reguladores llevan iniciativas conjuntas para aportar aún más a #ElSalvador
Como miembro de @asobitcoin recibirás este y muchos más beneficios exclusivos! pic.twitter.com/OFgzpO4GA6
— Asociación Bitcoin de El Salvador (@asobitcoin) March 30, 2023
In addition to attempting a financial comeback, Bukele’s ongoing efforts to reinvent El Salvador include promoting tourism, countering terrorism and building regional business hubs.
Related: El Salvador’s Bitcoin strategy evolved with the bear market in 2022
At the start of 2023, El Salvador passed legislation providing the legal framework for Bitcoin-backed bonds — Volcano Bonds.
#Plenaria90✍ Con 62 votos a favor, creamos la Ley de Emisión de Activos Digitales. pic.twitter.com/g1poXwLoH3
— Asamblea Legislativa (@AsambleaSV) January 11, 2023
The terminology of the Volcano Bonds is derived from Bitcoin City’s location, which is set to become a renewable crypto-mining hub powered by hydrothermal energy from the nearby Conchagua volcano.
Magazine: What it’s actually like to use Bitcoin in El Salvador