Cuba’s Private Sector Gets Tax Relief

By Circles Robinson

Self-employed bici-taxi driver.

HAVANA TIMES, May 27 — One of the complaints levied about the rules for starting a small business in Cuba has been the immediate license fee and tax burden on the entrepreneur. Now the Council of Ministers has announced short term relief for small businesses.

To make going into business a little more owner-friendly, the government will not charge payroll taxes for up to five workers during the rest of 2011.

Limits on seating at “paladar” private restaurants – a popular alternative for those with the funds to open one – were also increased from 20 to 50, a significant jump.

Another measure approved suspends taxes from the third to sixth months when private renters or taxi drivers have their homes or cars under repair.

The retroactive payment of Social Security contributions for people already self-employed before October 2010 was extended from two to ten years.

Likewise, women over 60, and men over 65, will not be obligated to join the special social security program for the self employed.

Personal income tax on transportation providers using animal traction (horse drawn carts) were given a 40% deductable consideration for expenses on their annual income (twice what was originally posted).

Those renting rooms or apartments to Cubans or tourists also saw the minimum license fee charged drop from 200 to 150 pesos a month in both currencies (In hard CUC currency when serving foreigners and in regular pesos when renting to Cubans).

2 thoughts on “Cuba’s Private Sector Gets Tax Relief

  • I agree with casey strong that this is a “step in the right direction.”

    The small entrepreneurial class–derisively called the petty bourgeoisie–never was, and is not now the enemy of either the working class or of socialism. The traditional mis-appreciation and disparagement of this highly productive and potentially progressive social sector has been a silly and catastrophic error of the world movement.

    What is needed in Cuba, and in the rest of the world, is theoretical rectification. A strategic alliance of the proletariat, intelligentsia and small business could then achieved to defeat monopoly capitalism worldwide.

    In Cuba, the small entrepreneurial sector sector could be brought fully into the socialist project, and socialist state power could be preserved and perfected.

  • This is at least a small step in the right direction.
    Encouraging free enterprise and private business through tax incentives always results in net benefits to the individual.
    If the Cuban Gov. can be convinced that these are good changes and that increasing these types of incentives does not weaken their position perhaps Cuba can slowly begin to move towards a viable Economy for all.

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