Bitcoin investors are reportedly exempt from taxes in El Salvador

According to a presidential legal counsel, El Salvador will exempt investors from paying capital gains and income taxes on Bitcoin (BTC).

Javier Argueta is a legal advisor to President Nayib Bukele. He wants to encourage foreign investment via major tax breaks for Bitcoin, Agence France-Presse reported Sept. 11.

“If someone has Bitcoin assets and makes high profits, there wont be any tax. Argueta stated that this is done to encourage foreign investment. El Salvador will not impose taxes on either the capital growth or the income.

Argueta said that the Salvadoran government would actively track Bitcoin transactions on El Salvador’s official BTC wallet Chivo to combat illegal use of the cryptocurrency. He said that a number of international institutions have recommended against money laundering.

If Bitcoin value falls, the Chivo wallet will temporarily suspend transactions. This is to reduce the volatility and price fluctuations.

Related: El Salvadors largest bank has partnered with Flexa to accept Bitcoin payments

El Salvador was the first country to adopt Bitcoin as a legal tender. All local merchants must now accept Bitcoin as a form of payment. El Salvador, in collaboration with global companies such as Bitso crypto exchange, and Silvergate Bank launched the official BTC wallet called Chivo. This allows users to convert BTC transactions into US dollars or withdraw using an ATM with special fees.

The Chivo wallet was temporarily removed for maintenance as previously reported. According to social media reports, many Chivo wallet users are still having major problems withdrawing or transacting from Chivo since El Salvador fixed their crypto wallet last week.