What is the knowledge industry bill?
In an action that seeks to promote the so-called “knowledge industry”, the Argentine government will send a bill to Congress for its parliamentary treatment. The sectors involved are software, geology, nanotechnology, industry 4.0, audiovisual production, biotechnology, and R&D in areas such as engineering and agriculture. The project’s goal is to create around 215,000 quality jobs in the sector and bring the export of related services from the current 6,500M dollars to 15,000 million in the next ten years.
The Minister of Production Dante Sica, along with the Secretary of Entrepreneurs and SMEs Mariano Mayer were in charge of the announcement. Sica said that “the fiscal impact will be in the order of 3,500M pesos, included in the 2019 national budget.” In turn, Mayer pointed out that there will be substantial improvements in tax matters in relation with the current Argentina’s Software Law. The basic requirements for companies to access the benefits are to demonstrate continuous improvements (certifications) in the quality of their products and services, invest in researching 3% of their invoicing or train employees the equivalent to 8% of their total salaries as to export 13% of their billing. The enterprises can also apply a tax credit bonus towards the VAT and income tax.
Know the project, the reactions of several sectors related with the knowledge industry were immediate. The president of Accenture Argentina, Sergio Kaufman, indicated that “as this project progresses, it is likely that 200,000 jobs will be generated”. In turn, the director of the Argentine Chamber of Biotechnology, Graciela Ciccia, said that the project is a very good sign for the emergence of new companies. Meanwhile, Globant CEO, Martin Migoya, highlighted the historic opportunity for the sector in terms of generating work. The president of the Chamber of the Argentine Industry of the Software Anibal Carmona said that “we are before the law of the creation of employment of the future”.
Despite this is an election year, all the industry’s players believe that the Congress will approve the project. For Carlos Palloti, a specialist in technological policies, the law should have consensus because the government has interest in it; and for the opposition the law would not only mean an extension of rights granted in its opportunity but also that it touches subjects of interest proposed by them. For his part Carmona said he hopes that this project would not remain on paper. Thus, we will have to wait for its formal presentation to see the final draft of the project and to forecast the real impact it will have on the knowledge and overall Argentina’s economy.
Update: on 22/5/19, Argentina’s Congress passed the bill, you can find it here.