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Friday, June 21, 2024

El Salvador Eliminates Income Tax, Currently holds over 5,700 Bitcoin

Key Takeaways:

  • El Salvador has eliminated income taxes on money entering the country from abroad, including remittances and investments in companies, to attract foreign investment and stimulate economic growth.
  • The country currently holds over $200 million USD worth of Bitcoin (as of 4/18/2024: $349 Million), which has seen a significant price increase of more than 190% in the last year.

El Salvador’s Congress has approved a reform to remove income taxes on money entering the country from abroad. This decision comes as the nation’s Bitcoin holdings, which currently amount to over $200 million USD (Now $349 Million as of 4/18/2024) according to Nayibtracker.com, have seen a significant increase in value due to the cryptocurrency’s price surge.

Eliminating the Income Tax

Before the reform, incomes equal to or greater than $150,000 were subject to a 30% tax rate upon entry into El Salvador. By eliminating this tax, lawmakers aim to encourage both domestic and foreign investment, ultimately leading to better employment opportunities and a stronger economy. Lawmaker Suecy Callejas, while defending the reform in Congress, emphasized the initiative’s potential to boost the nation’s financial standing.

El Salvador’s decision to remove income tax on foreign money flows, such as remittances and investments in companies, comes at a time when Bitcoin’s price has increased by more than 190% in the last year.

Bitcoin in El Salvador

President Nayib Bukele, an advocator of Bitcoin and its adoption in El Salvador, took to Twitter to express his confidence in the country’s economic future:

El Salvador made history in September 2021 by becoming the first country in the world to adopt Bitcoin as legal tender. Despite initial skepticism and criticism from international financial institutions, the move has since gained attention and support from the crypto community. The recent elimination of income tax on foreign money flows is expected to further improve the country’s appeal to investors and entrepreneurs looking to capitalize on the growing popularity of Bitcoin and other digital assets.

The success of these reforms will likely depend on the government’s ability to effectively manage its Bitcoin holdings, maintain a stable economic environment, and attract long-term investments that create sustainable growth and employment opportunities. President Bukele will need to create a balance between embracing the potential of Bitcoin and ensuring the overall well-being of the Salvadoran people.

El Salvador’s decision to eliminate income tax on foreign money flows, along with the country’s significant Bitcoin holdings and the cryptocurrency’s recent price surge, has the potential to reshape El Salvador’s economy. By attracting foreign investment and creating a more welcoming environment for digital assets, El Salvador is taking steps towards a future that embraces the potential of Bitcoin and other emerging technologies.

Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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