The figures for the sector are eloquent: 88% of companies feel the impact of the fall in activity as a result of the quarantine. In the case of small and medium-sized companies, the number of victims is 91%, while in those with less than 50 employees it is 73%.
The figures, which denote urgency, correspond to the Argentine software and computer services industry, a sector that thanks to its phenomenal international expansion was able to overcome in recent years the trail of economic crises that were accumulating, one after another, in the battered Argentine industrial fabric.
However, this apparent advantage did not leave him immune to the advance of the coronavirus, an unprecedented phenomenon in its scope, since it impacted everyone equally. As a consequence, the collapse of multiple businesses had a spectral tune throughout the world.
The scope of COVID-19 knows no borders; therefore, the companies linked to the so-called "4.0" industry had no place to take refuge, both within borders and in their own country.
This unprecedented situation also had another "stick on the wheel": the delay in the promulgation of the expected new version of the Knowledge Economy Law, which provides benefits to companies in the sector and which, until now, has remained unchanged to the awaits the opening of the parliamentary sessions.
It is worth reviewing the route of the initiative, not without turbulence:
- In February, the Government sent to Congress the bill to reform the norm promoted during the administration of Mauricio Macri, who had achieved its unanimous enactment in the Senate last year
- However, the Alberto Fernández's administration considered that this law "left out" small and medium-sized firms and that, in addition, it contemplated a fiscal cost designed before the deepening of the crisis
- Within this framework, it halted its validity, while the Knowledge Secretariat, headed by María Apólito, began the layout of the new draft in which other dependencies of the Ministry of Productive Development also participated.
Everything indicated that the project would become law in late March. But the coronavirus "stuck its tail": sessions were suspended and the sector, which bills more than $ 3 billion annually (and more than $ 7 billion if other business units are added) was left pedaling in the air waiting for a norm that, in moments of total stop, becomes more urgent than ever.
May now appears as the start line. And for both the government and the companies, it is a Law that should be in pole position as soon as the activities of the Legislative Branch are resumed.
What the project says
As confirmed by iProUP, the official project will be discussed this month, if consensus is reached for the opening of Congress. In principle, it presents some substantial differences with respect to the initiative outlined by Macrism, although it tries to maintain part of its essence. - The Law approved in 2019 reduced the Income Tax rate to 15%, and allowed that if a company supported a good part of its operation (70%) in promoted activities, all the company's income paid that rate.
- Now the rate will be 30%, but it establishes that the beneficiaries of the regime will have a reduction of 60% in the amount of the tax (although only for promoted activities). This, strictly speaking, should encourage the development of more activities of this type.
- Regarding employer contributions, private activity viewed favorably that the benefit is more simply applied: with a tax bonus for 70% of those actually paid, which will serve to settle Income Tax, VAT and advances .
- Although there is a cap for large organizations (equivalent to 3,475 employees), above which you will pay the full contribution for the surplus. However, for new additions, after registration, there will be no cap.
Although at first a smaller number of employees were considered, it was sought not to affect the market and not to leave out the 10 companies that give the most employment in the sector, with Mercado Libre as the spearhead.
Industry, at the rate of quarantine
Pushed by an internal context of deep economic crisis, this branch of activity closed 2019 with growth of 44%. Although it was one of the most vigorous, its numbers fell below annual inflation, which exceeded 50%. In this sense, not even the lucrative contracts abroad, which report income in dollars, could cope with the centrifugal force of the recession.
"The sector is 'cross', it sells to the entire economy. For example, those that make tourism software are completely stopped. The same thing you can see sector by sector", graphs iProUP Sergio Candelo, president of the Chamber of Companies of Software and Computer Services (CESSI).
The manager also points out that "the difference from this crisis to, for example, that of 2002, is that you had the world to go. Today, exports begin to fall because the most hit items also fall throughout the world." Thus, this branch of activity for now does not find its escape route.
Candelo maintains that practically all companies spent on account of the enactment of the new law, so that its approval in Congress went from having a status of "necessary" to "urgent". "Until December 18, we started 2020 with a new law, therefore, all your costs included this issue. At that time, the calculations were u $ s250,000 per year in benefits for a company of up to 100 people, fruit of the new regulations, "says the executive.
"On January 2 we found out that it was not going to be implemented, but that a law was going to come out and there was a promise that it would be retroactive. So, you had to solve it financially during those two months, but not economically, because you were going to have the result no later than March, "reveals Candelo. And adds:" However, the lack of the new legal framework was joined by the pandemic, which slowed down Congress and, at the same time, brought down a large part of the market". What is said to be a perfect storm.
From CESSI confirm that efforts were made to, at least in an emergency scheme, enable the old Software Law through a DNU, although the request did not prosper within Casa Rosada. On the other hand, there were also difficulties in accessing government aid to companies affected by the pandemic (implemented via decree 376/2020).
"Aid is segmented in a way that you are left out. To request it, you have to have a nominal drop in billing, but since inflation is 50% and overall growth is between 20% and 30%, only 3 companies in the sector accessed the benefit, "clarifies the CESSI executive.
However, he clarifies that, despite some fluctuations, the dialogue with the national authorities remains fluid. Meanwhile, from the offices on Balcarce Street they finalize details and project the proposal "pique en punta" once Congress steps on it.
For the Government, the Law comes first
"The sector always has a good dialogue with all governments and all provinces. It is an industry that is not in the crack," Candelo explains, adding that "the good thing is that the development minister also sees it that way, no you have to go and explain that we are not our importance. "
From the camera they reveal that Matías Kulfas wants it to be the first law to leave once the sessions resume, and the same sources from the ministry consulted by iProUP repeat. "The negotiations with the president of the Chamber (Sergio Massa) and with several deputies are being advanced to give priority to the Knowledge Economy Law," they assure from the Government.
In this regard, he clarifies that, although the outlook is complex because it is not known how he is going to meet, "notes have already been sent to effectively speed up his treatment."
The order in which the initiatives are presented on the premises is not haphazard. With controversial proposals, such as the tax on great wealth on the list, it makes sense to place the Knowledge Economy Law at the starting line, since the great debates will be left until the end of what looms as a marathon session.
Likewise, all the sources consulted agree that, broadly speaking, there is already a general consensus of approval regarding the new law. Words more, words less, all the actors are ready for him to come out right now.
"The relationship with pro-government and opposition deputies is one of direct dialogue. Everyone estimates that when he leaves, he will do it quickly. They even call us to see if everything is OK with what they will approve," reveals Candelo.
Is that, after the discussions in January and February, where even rough edges between Mercado Libre and Casa Rosada were smoothed out (the first draft stipulated conditions that left Marcos Galperin's signature out of profits), a general agreement was finally reached between the different sectors of the innovation industry and the Ministry of Productive Development.
Therefore, as iProUP anticipated, one of the pegs that will fit most strongly in the "equalizer" of measures is that of equity. In other words, the benefits have a greater impact on small and medium-sized companies but without harming unicorns.
"How are we going to go against Mercado Libre, which generates a lot of quality employment, is a source of innovation and is committed to financial inclusion, by allowing any business to accept cards," was heard in the corridors of Irigoyen 250.
In this sense, the new initiative seeks to relax the requirements for small and medium-sized companies to access the promotion regime with advantages similar to those of large companies.
"It is a pro-SME law. They have fewer entry and revalidation requirements than large ones," a government source told iProUP.
Now, with the impact of the coronavirus reverberating in every fiber of the Argentine economy, Kulfas and the companies smoked the pipe of peace and advanced in a common goal: if they fight among themselves, they will be devoured by outsiders; therefore, the Law will be first.
