El Salvador's Congress approved a law on Tuesday, May 20, 2025, imposing a 30% tax on transactions from foreign donors to local organizations. The legislation, passed with 57 votes in favor and 3 against, is aimed at regulating what the government describes as "foreign agents." The law is expected to take effect eight days after its publication in the official gazette.
Supporters, including ruling New Ideas lawmaker Suecy Callejas, claim the legislation will increase transparency and protect national sovereignty. They say it will prevent covert external interference by establishing a registry for organizations to sign up, allowing the government to supervise their activities. Funds generated from the new tax will be allocated to general, public, or social interest projects.
Critics argue the law will significantly tighten state control over civil society and may hinder the work of NGOs, particularly those focusing on human rights and government accountability. Human rights groups have expressed concern that the move mirrors similar efforts in authoritarian-leaning regimes to silence dissent and weaken civil society under the guise of national security. Concerns have also been raised by international organizations such as Amnesty International and Human Rights Watch.