The El Salvador government is reportedly exempting investors from paying capital gains tax and income tax on Bitcoin (BTC), according to a legal adviser to the president.
Javier Argueta, legal advisor to President Nayib Bukele, wants to encourage foreign investment through massive tax breaks for Bitcoin, Agence France-Presse reported on September 10th.
“If you have assets in Bitcoin and are making high profits, you don’t have to pay taxes. This is clearly being done to encourage foreign investment, ”Argueta said, adding that El Salvador would not tax“ capital gains or income ”.
According to reports, Argueta noted that the Salvadoran government will actively monitor Bitcoin transactions on El Salvador’s official BTC wallet, Chivo, in an attempt to combat the potentially illegal use of the cryptocurrency. “We are working on a number of recommendations from international organizations to combat money laundering,” he said.
The Chivo Wallet will also temporarily suspend Bitcoin transactions in the app if the value of Bitcoin falls in order to mitigate the effects of strong fluctuations or price fluctuations.
Related: El Salvador’s largest bank partners with Flexa for bitcoin payments
Last Tuesday, El Salvador became the first country in the world to accept Bitcoin as legal tender and urged all local merchants to accept BTC as payment. Working with global companies such as the Bitso crypto exchange and Silvergate Bank, El Salvador has launched an official BTC wallet called Chivo that allows users to convert BTC transactions into US dollars or withdraw money from a special ATM with no transaction fees can.
As already reported, the Chivo wallet was temporarily dismantled on the start day for maintenance work. According to several reports on social media, some Chivo wallet users are still facing major problems trading or withdrawing money from Chivo after El Salvador repaired the crypto wallet last week.