Bitcoin-powered El Salvador has passed a bill that eliminates income tax on remittances and foreign investments.
The National Assembly of El Salvador approved the bill to reform the Income Tax Law at the plenary meeting held on March 12. This was reported by the legislative body from its X account, highlighting that the income tax, which was applied to family remittances, investments and any foreign capital, has been reduced to 0%.
The income tax levied in the country on international investments and money transfers from abroad was a 30% rate.
Now, with the recently approved reform, Salvadorans will not have to pay taxes for sending money to their families in the country, nor for moving their funds from abroad to the nation.The National Assembly of El Salvador emphasized that, regardless of the amount, foreign investments and remittances are no longer subject to the aforementioned tax from now on.
A bold move to encourage foreign investment
The exemption from income tax on remittances and foreign investments is part of the bold move the country is making to encourage investment and boost its economic growth.
Under the leadership of Nayib Bukele, El Salvador has launched a paradigm shift, seeking to achieve financial independence and which began by making Bitcoin legal tender within its territory. 7th September 2021 Bitcoin Law came into force, which allows citizens and foreigners to use bitcoin as a means of payment and exchange of value.
Since then, Bukele has promoted and implemented a series of changes that position the country as a haven for investors, especially for holders of the precious cryptocurrency. In addition to eliminating income tax for capital investments and monetary transfers, El Salvador also has abolished taxes for technology companies and developers of Artificial Intelligence (AI) and other technological innovations such as Bitcoin, in order to encourage the growth of innovation and attract investors in the sector to the nation.
In April 2023, Bukele had noted that the approval of the “Promotion of Innovation and Manufacturing of Technologies” law will allow technological innovations like Bitcoin to thrive in the country, a significant achievement in his plan to become the world leader in the use of Bitcoin and emerging technologies. In addition to the tax exemption, Bukele has also launched other initiatives focused on strengthening his leadership and promoting the adoption of Bitcoin.
Freedom Visa: El Salvador's Bitcoin Fountain
Today, El Salvador Street owns about 2.860 BTC, which are valued at around $209 million USD, according to the current price of Bitcoin. The country, as reported by Bukele, has been investing in the cryptocurrency for a few years now. However, recently, his president clarified that the main source of Bitcoin for the country's reserves is its Freedom Visa program, which was announced in December of last year along with an invitation to Bitcoin holders and investors.
The Freedom Visa is designed to grant citizenship to 1.000 Bitcoin investors per year who invest $1 million or more in the cryptocurrency or USDT stablecoin in El Salvador. In late February, the Bitcoin Beach project reported that, to date, El Salvador had granted 7 citizenship visas under this program.
Continue reading: El Salvador grants Freedom Visa to 7 foreign Bitcoin investors
