The government of El Salvador is trying to free their investors from paying a capital gains tax and an income tax on Bitcoin (BTC) states the presidential legal counsel
Javier Argueta is a legal advisor to president Nayib Bukele who is trying to motivate foreign investment through major tax breaks on Bitcoin, Agence France Presse reported Sept. 10. “If a person has assets in Bitcoin and makes high profits, there will be no tax. This is done obviously to encourage foreign investment,” Argueta said. El Salvador will not impose taxes on “either the capital increase or the income.”
Argueta stated that the Salvadoran government would be trying to trace Bitcoin transactions on El Salvador’s official BTC Wallet, Chivo, to fight the illegal use of the cryptocurrency. “We are implementing a series of recommendations from international institutions against money laundering,” he said. The Chivo wallet would be to stall Bitcoin transactions on the application if Bitcoin value disrupted to lessen the impact of extreme volatility or price fluctuations.
On Tuesday, El Salvador became the first country in the world to take on Bitcoin as legal tender which needed all its local merchants to accept BTC as a means of payment. With the help of global companies like Bitso crypto exchange and Silvergate Bank, El Salvador launched the official BTC wallet known as Chivo which let the users change BTC transactions into the United States dollar or withdraw using a special ATM without the transaction fees. The Chivo wallet was taken down for maintenance temporarily on the day of launch. There were several social media reports who stated that they have been going through issues with transacting or withdrawing from Chivo after El Salvador secured the crypto wallet last week.