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El Salvador Adjusts Income Tax Laws For Foreign Investors

Updated: May 6

As reported by CoinDesk, El Salvador, the small Central American nation, continues to make waves in the world of cryptocurrencies as it embraces Bitcoin (BTC) and other digital assets. The nation's president, Nayib Bukele, has been a vocal advocate of Bitcoin, and his government's latest move is yet another effort to position El Salvador as a hub for foreign investment and a haven for crypto enthusiasts.

According to recent reports, El Salvador has eliminated income tax on money coming into the country from abroad. President Bukele announced the move on social media, saying, "Congress has reformed our income tax law, for international investments and money transfers, dropping the rate from 30% to 0%." This tax reform is expected to make El Salvador an even more attractive destination for foreign investors and could encourage more people to transfer money into the country.

El Salvador was the first country in the world to make Bitcoin legal tender, a move that was met with both praise and criticism. Since then, the country has been accumulating cryptocurrency, and its treasury is now sitting on around $84 million in unrealized profit on its holdings. The government has also introduced a law granting citizenship to Bitcoin investors who make a donation to the government.

These moves have drawn the attention of prominent investors in the crypto space, such as billionaire Tim Draper. Draper recently appeared on the Web3 Deep Dive podcast and sang the praises of El Salvador's pro-Bitcoin stance.

"Within 30 or 40 years they will have gone from the poorest and most crime-ridden nation to one of the richest and most innovative nations in the world only in that period of time and only because they embraced Bitcoin," Draper said. He went on to call El Salvador "the most attractive country in the world to live in just because they embraced Bitcoin."

El Salvador's embrace of Bitcoin has not been without controversy, however. The move has sparked protests in the country, with some citizens concerned about the volatility of cryptocurrencies and the potential risks they pose.

Nevertheless, President Bukele remains committed to his pro-crypto agenda, and it remains to be seen what other measures his government will take to attract investment and promote the use of digital assets in the country.

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