Taxes in Cuba

Small farmers pay taxes, should they have a say in how those funds are spent? Photo: Elio Delgado

By Dmitri Prieto

The subsequent distribution of taxes is decided on by the state bodies that make up the national, regional, ministerial and other budgets.

The case of self-employed workers (like the famous Havana taxi drivers who use the classic 1950s American cars to offer their services) is different; they have to pay taxes.

The same thing happens with entertainers, artists, small farmers, workers at foreign companies, people who receive monetary awards from contests, etc.

There is a head office that collects taxes -the ONAT- with local branches across the country. Each year the ONAT launches a media campaign to promote the benefits of paying taxes as a reinvestment in overall citizen wellbeing: schools, hospitals, etc.

In addition, all Cuban workers pay a social security rate subtracted automatically by the human resources center at their workplace.

There are also fees collected by stamps and checks for bureaucratic procedures: registering a small business, or requesting a birth or marriage certificate.  Fees for an exit permit, any other international process or for marrying a foreigner have to be paid in hard currency.

Lastly, everyone who leaves Cuba on a plane has to pay an airport tax that has constantly gone up since it was first established in the 1990s.  I don’t know why this tax isn’t collected by the airlines, by including it in the price of the ticket.  Sometimes there is a lineup in the airport to pay this tax; and we are supposed to think the state will put it to good use.

On this last point, an idea occurred to me on how to simplify the work of state employees.  If all Cubans, either directly or indirectly, pay taxes then in principal we have the right to decide and control the social projects where our money is directed to.  We could do the following:

1- Make all taxes transparent (I mean, re-calculate the State salaries in order to make taxes visible).

2- Establish a progressive scale for the taxes paid by citizens once a year.  To make the process more democratic, there could by a yearly referendum to establish the scale.

3- Every citizen would decide where each peso of taxes would go that, by law, would have to be shared with society… and maybe not only state entities would receive this money, but also NGOs, like the Red Cross, Territorial Army Reserves (MTT)… the whole procedure would be like making multiple bank transfers at the same time one fills out their tax declaration, thus transferring the money straight to its final users.

So the country’s budget would be constructed in the very same way a family devises its annual budget.

Would anybody object to such a proposal on letting our fellow citizens come up with the annual budget of our country?  Probably the head of a certain French leader named Louis XVI of Bourbon contained these same ideas back in 1789, and we all remember where that head ended up.

Many Latin American countries have experimented with the so-called participatory-budgets; Cuba stands out for its absence on this list.

We would need to better educate the people, studies would have to be carried out and errors would be made.  Of course.  But, the current government also makes errors.  Shouldn’t they also educate themselves and carry out studies?

And people would surely prefer discussing once a year about where their money goes to filling out forms that are then sent to other offices for others to decide.

Or is it that they would say that the people are too stupid?  If any one dares too, I would recommend that they become a subject of the King of Saudi Arabia, which I think is the only feudal country left in the world.