In addition, another of the objectives is to generate more sources of specialized jobs in the country, since technology is the future.

The economic growth and sustainable development of the country, by strengthening competitiveness through the promotion of innovation and technology manufacturing, is of vital importance for the new Legislative Assembly, as well as the rest of the governmental institutions.

"We want to accelerate innovation in the technology sector in our country and that is why we want to encourage companies. In addition, we are going to expand training opportunities for young people in the area of technology", said minister Hayem.

In view of this, the president of the commission, parliamentarian Rodrigo Ayala, indicated that this is not an isolated effort, but that "it is part of a strategic vision, in order to benefit the population. We will help many young people who have knowledge in this area".

The project contemplates that the companies related to this area will have benefits, such as exemption from municipal taxes, elimination of the payment of capital gains, as well as tariffs on the importation of goods necessary for the development of the incentivized activity.

Companies engaged in programming, development of models and systems using artificial intelligence, cloud-related services and technological manufacturing would be exempt from paying taxes.

All these benefits described above would have a duration of 15 years, according to what was stated by the representative of the Ministerio de Economía (MINEC) in the working session held by the legislators.

According to the Economy official, the companies that will be able to acquire the incentives are those dedicated to the analysis of software, computer systems, consulting services to the technology sector, programming, management and maintenance.

Advantages of the regulation

According to the law, which consists of 20 articles, the regulation will help accelerate technological innovation and manufacturing, such as microelectronic and semiconductor components.

It will also expand and diversify salvadoran human talent for technological manufacturing and with it the country will be able to achieve leadership in the development of advanced technology manufacturing in Latin America.

In fact, article two of the law under study indicates that it seeks to improve access and interconnections in the supply chain and expand efforts to reduce supply chain vulnerabilities for technology innovation.

Tax incentives for 15 years

According to the proposal issued by MINEC, there are five incentives to be granted to companies such as total income tax exemption with respect to the incentivized activities.

"The objectives are consistent with the task of contributing to the economic growth of the country, which is inclusive and sustainable, we are sure that these results that we are seeing in the economic sector will be multiplied", said the representative of the ministry.

The rest of the incentives described by the Minister of Economy consist of the exemption of all types of Income Tax withholdings; also the total exemption of municipal taxes on declared net assets; the total exemption of payment of customs duties on the importation of goods, inputs, machinery, equipment and tools necessary for the development of the incentivized activity; finally, the exemption of the payment of capital gains stipulated in articles 14 and 42 of the Income Tax Law.

"The law opens the space to benefit those companies that are dedicated to the development and commercialization of cloud computing services, for example those that rely on artificial intelligence, massive data analysis systems and cybersecurity solutions", said minister Hayem.

Translated by: A.M