On Friday, Argentina’s congress passed a bill that is slated to provide tax incentives for tech startups and industry mainstays in hopes of stimulating economic recovery.
The tax boosts are slated to last for 10 years and are meant to spur on hiring to turnaround the country’s unemployment figures. The measure could double employment numbers over the next decade, Argentina officials said, and is also expected to increase exports from the tech sector by $4 billion.
“There’s absolute agreement among all political parties about the relevance of this sector,” Production Minister Matias Kulfas told Bloomberg on Friday. “The pandemic is speeding up digital priorities, and we have to see it as an opportunity to strengthen foreign investment.”
Even prior to the pandemic, Argentina’s economy had long been struggling to maintain growth and spur job creation. At the end of the second quarter, the Argentine economy contracted a record 19.1% versus the same period last year.
Now, the country is in part looking to its tech sector to help provide a needed spark.
Argentina tech companies like Mercado Libre and Globant have boomed into unicorns. Mercado Libre, which is an online retail platform in the same vein of eBay, is now worth an estimated $31 billion and is by far the most successful tech company in the region.
Unfortunately for Argentina, there seems to be no end in sight to the economic and social devastation brought on by COVID-19, despite the country’s promising initial response to the pandemic. Sixty percent of coronavirus tests in Argentina are now yielding positive results, making the South American country home to the world’s highest rate of positive test results in the world. A recent report from the scientific publication Our World In Data said a lack of testing and not enough restrictive measures put in place are two factors that have led to the high rate of positive results.