Taking advantage of small business people

Osmel Almaguer

A self-employed friend of mine is visited daily by a tax collector who demands a small amount of money from him for the space he uses to set up his table. This payment is required by the Municipal Trade Office (DMC) and is calculated at a rate of 10 pesos per square yard.

This payment system was imposed recently without the publication of any resolution or piece of legislation.

Previously the collection of taxes for the use of space was administered by the Municipal Office of Physical Planning (DMPF), whereby self-employed workers would pay a one-lump sum at a bank for an entire working year. Accordingly, my friend paid 120 pesos at the bank for all of 2011.

Notwithstanding, this fellow has started showing up charging more money and putting it in his pocket. He flashes a business card from the DMC and a schedule indicating that my friend’s obligation is to pay five pesos a day to put up his table in front of the market. In exchange, the collector gives a voucher to those who comply, since not all self-employed workers have agreed to pay.

It doesn’t bother my friend to pay his taxes correctly; what bothers him is “the nerve and corruption” at the DMC. Since this agency has not been able to function efficiently, it has taken advantage of the bureaucratic environment in Cuba to snatch tax collection right from the DMPF office, all with the objective of increasing its own revenues and creating an illusion of efficiency.

Added to that, this is a form of collection that is ideal for corruption and theft, because no one controls those who are doing the collecting or those who regulate those operations at DMC.

This phenomenon has a precedent. A few years ago, maybe more than 10, DMC was the entity in charge of the collections at vendor sites, and it performed this duty that same way. Realizing a problem, it seems that some honest or conscientious manager came up with the idea of assigning that responsibility to DMPF, and therefore they created the payment system that lasted until recently.

However it seems that later another manager — or perhaps the same one, but with several years of becoming hardened by the governmental system of decay — once again interceded in favor of DMC, the agency that has diligently begun collecting “its” money without even waiting for a general consensus in terms of the new measure.

I say this because I know that enraged complaints have been generated in other municipalities, and there are even some areas in which this measure remains on hold while waiting for a definitive decision.

The vendors’ outrage is understandable since the amount of taxes demanded is often extortionate. In the case of my friend, he’s paying 5 pesos a day over 20 working days a month, equaling 100 pesos. So over the 12 months in a year he’s paying 1,200 pesos, meaning that what they’ve done is multiply the tax on table space by 1,000 percent!