El Salvador has become the first country in Central America to suspend taxes on Artificial Intelligence (AI) developers, with the aim of promoting technological innovation and attracting investment in this sector.
The National Assembly of El Salvador has approved the bill for the Promotion of Innovation and Technological Manufacturing, which exempts technology companies from taxes, including those that develop Artificial Intelligence and robotics applications.
The bill in question, which was approved by the Assembly with 69 votes in favor, establishes a special tax regime where natural or legal persons engaged in the development, research or application of AI in the country are exempt from income tax, capital gains tax and municipal taxes.
El Salvador's tax incentives to boost Artificial Intelligence
El Salvador's new tax regime will be in effect for 15 years and will benefit both national and foreign companies that want to establish themselves in the country to develop AI projects.
Through these tax incentives, El Salvador seeks to promote economic growth, job creation and the country's competitiveness in the field of technology and innovation.
Rodrigo Ayala, a member of the country's legislature and the main promoter of this tax initiative, highlighted El Salvador's vision of becoming a regional benchmark in Artificial Intelligence. The approval of the tax exemption bill is an important step towards achieving this goal.
In addition to this, Ayala highlighted the multiplying potential that AI can have in various sectors of the country, to stimulate economic and social growth.
El Salvador is the fifth country in Latin America and the Caribbean to join the UNESCO Recommendation on the Ethics of Artificial Intelligence, demonstrating the nation's and government's commitment to the development of ethical, fair and inclusive AI.
Furthermore, the new tax incentives approved will apply to income, property and capital gains. The recently approved law even eliminates import tariffs on computer and communications equipment for the development of AI.
The development of AI in the world
Artificial Intelligence is a developing technology that is offering great opportunities and challenges for society and the economy. Therefore, it is important for governments to establish adequate regulation that guarantees trust, security and respect for human rights.
In recent months, several countries have begun to look at this innovation to assess its potential benefits and risks. In the case of Italy, regulators there decided to temporarily ban ChatGPT, the AI developed by OpenAI, considered the most powerful currently.
Other countries, such as the United States, are discussing what measures should be put in place to help create clear rules and standards to govern the development of AI and mitigate its potential risks.
The European Union has also presented a bill on Artificial Intelligence, seeking to establish harmonized standards to promote innovation and responsible technological development in the region.
Continue reading: Are we experiencing Choke Point 2.0?
