Nayib Bukele is a polarizing figure in an international sense. Domestically, he seemingly can’t put a foot wrong. Having sterilized the potency of San Salvador street gangs, he uses Twitter as a bridge to vocalize his steps to make El Salvador a safer place. It is part of a more comprehensive strategy, the second of which is his tech tax which we will look at today.
Although land-based casinos have frowned upon in El Salvador, many citizens who enjoy playing casino games like poker can find plenty of tables online, where the laws aren’t as rigid, and it is generally accepted. Although there has been no definitive legislation to prohibit or allow online casino gaming, it is something that authorities don’t consider a priority. Online gaming is starting to take a leaf out of El Salvador’s book and utilize the security and fluidity of cryptocurrency transactions. Bitcoin is the new cash for poker online. Whereas in El Salvador, Bitcoin is the new cash, period. Innovations in this area continue to push boundaries, and it is an exciting time to be involved in the cryptocurrency sector.
For those who enjoy gambling, ensure that you only gamble with money you can afford to lose. By setting deposit and time limits, you ensure you can keep tabs on your gambling and ensure it doesn’t become an issue. Reach out to somebody if you feel it is becoming a problem.
Is The Tax a Groundbreaking Idea?
El Salvador isn’t the first country to have an idea of not taxing specific sectors to bring in cash-rich companies who want to keep more of their profit. The United Arab Emirates (UAE), Bermuda, Monaco, and the Bahamas have stimulated exponential growth by abolishing personal income tax.
When you look at the sprawling metropolis of Abu Dhabi or Monaco’s lush, peaceful streets, you can see where central governments would like to bring this type of wealth to their tax base. However, the UAE has recently announced plans to introduce its first-ever corporate tax rules, which could signal a move in the opposite direction. However, the whole point is that it is tax-friendly; when people and companies move into the country, they more than makeup for it through their purchases or investments while living there.
In many ways, the idea of a specific tech tax is unique. The countries we mentioned have introduced tax abolishment across all personal incomes. However, El Salvador has singled out this sector for specialist treatment to ensure a stimulus that homes in on tech companies and innovation.
El Salvador As A Tech Hub
Given that Bukele has driven down crime to such a spectacular extent that bringing in the world’s biggest tech companies is miraculous. It is a controversial tactic that he has adopted in a bid to rid his country of the systemic gang issues that have plighted its citizens for generations.
These figures have been tackled effectively. With the help of a series of mega prisons for gang members, Bukele is now looking outward toward the world to improve El Salvador’s economy and society. Although the tech industry is experiencing a downturn, billion-dollar companies are still looking to take advantage of tax-effective opportunities worldwide as and when they appear. Bukele has gutted the problem that El Salvador faced with its organized gangs.
He has brought in Bitcoin as a currency to show the world that he is serious about pushing El Salvador as one of the top improving countries in Central America and further afield.
You only need to look at the global hubs of Abu Dhabi, Dubai, and the Bahamas to see how efficient tax laws can help stimulate growth and help a country make that next move up the international ladder.
For example, El Salvador is a small country. Although it has been doing well over the last few years, they recognize that incentivizing colossal sectors like the technology industry should help increase growth even further.
The Bottom Line
It is a gamble, but it is a calculated risk from a leader who has a clear strategy of where he wants his country to move. Although it will take time to encourage large companies to move to El Salvador, the United States is still the number one destination.
Tech companies don’t just cover some of the household names we see online. Still, it stretches to other sectors, such as television, computing, and gaming console manufacturing. With such a broad spectrum and innovative companies in other tech sectors like AI, it is an overall market with enormous potential. Other countries have not allowed tech companies to be exempt from tax. It is a brave ploy from one of the world’s youngest and most polarizing leaders.
Suppose they can ensure that the structure of El Salvador’s society remains safe and crime remains free. In that case, once one tech company moves to the country, it could encourage more to follow suit and snowball into a fantastic idea.
