Cuba Business

Tax authorities impose further restrictions on self-employed

Posted August 03, 2004 by publisher in Cuba Business.

By Reinaldo Cosano Alen | [url=][/url]

Cuba’s tax authority, the National Tributary Office (ONAT), has issued new
regulations for the self-employed which many here say will only tend to put
many of them out of business.

At first glance, the most onerous of the new regulations seems to be a
new requirement that all self-employed hold down a job with the State
and only practice the trade or business for which they are licensed
after working hours.

“The most irritating thing is they tell us about these new restrictions
all of a sudden,” said self-employed worker Alberto Suárez. “They give
us from July 8 to August 1 to find a job, when everyone knows the
staffs of every State enterprise are either full or over-full. And that,
precisely in the summer, when most of the bosses are on vacation. The ONAT people were very clear: Whoever doesn’t have the documentation in order by August 1, will lose his license,” said Suárez.

Another man had his own reason why it would be unlikely he could find a
job: “I’m a welder. Even though my skills are needed, I’ve been
unemployed for the last 8 years,” said Lázaro Lemus, of San Cristobal, in
Pinar del Río province. “Whenever I find a job, they throw me out in short
order, not because of the quality of my work, but because the inevitable investigation reveals that I’m a human rights activist and then they
label me ‘not trustworthy’ and fire me.

In addition to requiring that the self-employed find jobs, the new
regulations require that they renew all the documentation for a license
every two years, and that they provide full documentation from the Housing Authority, also every two years, of all permits to use their homes for business purposes. The regulations also impose a new tax of about 340 dollars per year.

A self-employed worker in Candelaria, who asked that he not be named,
echoed the feelings of many: “It’s abusive. They don’t know what else to
do to take away our licenses. If we violate just one of the
regulations, we lose it. Then there’s the inspectors. It’s impossible!”

Another worker who did not want to give his name defended the social
usefulness of the self-employed: “Private workers provide services that
the State cannot or will not provide.”

Among the usual occupations for the self-employed are repairs to
bicycles, tires, horse-drawn carriages, kerosene or gas stoves, small
appliances, and shoes; personal services, such as hair cuts, food services,
and a myriad others. Still, forthcoming regulations will keep 118
designated occupations and deny licenses to 40 more.

Another man, who gave his name as Hernández and said he is a radio and
TV repairman, pointed out the differences in the service offered by
State and private shops: “The State repair shop for small appliances
generally doesn’t have spare parts. With us it’s different. We find the
parts any which way. I buy old radios and TVs to use the components.

With me, it’s very unlikely the customer will be unhappy; I do quality
repairs at a reasonable price and I guarantee the work.”

Member Comments

On August 05, 2004, Jesus Perez wrote:

The Cuban government should encourage individual entrepreneurship, the country needs more freedoms, not just political but also with respect to people’ ability to help the general economy and reduce unemployment, in other words, less restrictions, more imagination.