Argentina has begun offering tax incentives to technology companies in a bid to boost employment and attract foreign investment.
Under a new legislative bill approved last week, the government will provide tax-breaks to technology firms that train and hire local workers.
The country’s Production and Labor Ministry has stated that the incentives would double the employment in the sector in addition to bringing in an additional US$4 billion in revenue for the country’s technology firms over the next ten years.
Today, according to Bloomberg, the sector has employed 115,000 people. IT services export account for 10% of the country’s export revenue, with the United States being the main export market.
The South American country is home to the region’s famous tech firms, such as Globant and Mercado Libre.
More than the employment, the IT services providers bring much-needed US dollar, creating room for the country’s central bank to restore the price of the peso.
Already in shambles, the Argentine economy has contracted nearly 20% this year amid the financial crisis exacerbated by the COVID-19 pandemic.
“There’s absolute agreement among all political parties about the relevance of this sector,” Production Minister Matias Kulfas told reporters recently. “The pandemic is speeding up digital priorities, and we have to see it as an opportunity to strengthen foreign investment.”