SAN SALVADOR, El Salvador (Reuters) – El Salvador’s ruling party legislators approved late Tuesday a measure to remove for 15 years all taxes on companies that develop artificial intelligence (AI) or other computer programming in an effort to make El Salvador a more attractive destination for tech.
The President Nayib Bukele, who announced the bill late last month, was the first to promote it.
Bukele’s New Ideas Party dominates Congress.
The bill exempts certain companies from paying income tax, local government taxes and capital gains taxes. It also waives tariff payments for imported goods needed by technology businesses.
The 84-member unicameral parliament approved the bill with 69 votes in favor.
Rodrigo Ayala, a New Ideas legislator, said during the debate: "With these exceptions, we facilitate the development of our technological sector and manufacturing, which will help to emerge a new industry."
Bukele's and his allies' efforts to rebrand Central America as a hub of innovation are exemplified by the new tax incentives that will be offered for the country's nascent technology sector.
El Salvador became the first country to accept the bitcoin cryptocurrency as legal tender alongside the U.S. Dollar in 2021.