The Legislative Assembly of El Salvador has unanimously passed a measure to eliminate income tax on foreign investments and remittances. President Nayib Bukele shared the news on the popular social media platform X, expressing his support for the decision. The measure received an overwhelming majority of 69 votes out of a possible 84.
This development is part of a series of significant changes that have taken place in El Salvador since Bukele’s election in 2019. One of the most notable actions was the declaration of Bitcoin as legal tender in the country in 2021. El Salvador also acquired 200 BTC for its reserves. These changes have had a positive impact on the country’s economy, which has shown steady growth. According to the World Data Bank, El Salvador’s gross domestic product increased from $24.9 billion in 2019 to $32.4 billion in 2022. It is estimated that the economy will continue to grow by 2.8% in 2023.
Furthermore, El Salvador’s purchase of Bitcoin in 2021 has proven to be profitable. Since BTC surpassed the $72,000 mark in the week of March 10, the country has generated $85 million in profit.
Bukele’s popularity was evident in his recent reelection on February 4, where he reportedly secured over 85% of the vote.
This latest tax adjustment follows El Salvador’s previous decision to eliminate taxes related to tech innovation in April 2023. The country enacted a bill to remove 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.