Cuba unveils more self-employment rules, hefty tax hits

Cuba unveils more self-employment rules, hefty tax hits
afp
On Monday 25 October 2010, 22:45 EST

Cuba Monday unveiled rules for broader self-employment which it hopes
can pick up slack as the Americas' only communist government lays off
half a million state workers over six months.

The government already has unveiled guidelines for free enterprise
activities in 178 fields, as part of the plan to absorb workers to be
laid off into a larger if still marginal private sector.

Havana plans to cut the 500,000 state jobs by March 2011.

Reforms announced earlier will allow Cubans to operate a wide range of
micro businesses -- accountants, masseuses, park custodians, or even
open small fruit and vegetable stores.

But many economists have doubts that the experiment can absorb so many
former state workers.

Among rules detailed in the government gazette Monday, it was announced
that self-employed will pay a 25-50 percent income tax; a 10 percent
sales tax; 25 percent tax for hiring workers; and a 25 percent tax to
social security.

The income tax scale for these workers will run from 25 percent for an
income of 5,000 Cuban pesos (about 200 dollars) a year, to 50 percent
for those with an income over 50,000 pesos (about 2,000 dollars) a year,
the rules showed.

One novelty: self-employed people will be able to hire workers outside
their families. That will be allowed in 83 of the 178 job classes.

In theory, that opens the door to small and mid-sized businesses which
were eliminated by the communist government in 1968.

But the employer will pay steadily increasing taxes based on the number
of workers he employs to avoid concentration of wealth, the Cuban
Communist Party newspaper Granma reported.

On September 13, Cuba announced plans to slash one million state jobs,
including half a million between October and March.

http://au.finance.yahoo.com/news/Cuba-unveils-self-employment-afp-2141668783.html?x=0

Cubans queue for business permits

Cubans queue for business permits
Last Modified: 26 Oct 2010 07:20 GMT

Cubans have begun queuing outside government offices across the capital,
Havana, to register their own businesses as the country made official a
sweeping economic overhaul announced last month.

Cuba unveiled new rules for broader self-employment in the government
Gazette on Monday, a month after announcing new guidelines for free
enterprise activities in 178 fields.

The government said last month that it planned to expand its private
sector in an effort to help preserve socialism, but the rules did not
become law until they were published on Monday.

Under the new measures, Cubans will be able to open restaurants, repair
homes and cars, train animals, sell wine, provide transport, work as
clowns and open many other businesses, some currently prohibited by the
communist-led government.

"I hope this licence will bring me a better future," the Associated
Press news agency quoted Lazaro Ramos, who was one of about 20 people
waiting outside a government office in Havana's 10 de Octubre
neighbourhood, as saying on Monday.

Ramos, 34, said he was unemployed but was hoping to get permission to
make piñatas for children's parties. "The economy is not good. But with
this, I will be able to make ends meet."

Simplified tax system

Under the rules detailed in the Gazette, authorities said the majority
of the country's new self-employed license owners will be eligible for a
simplified tax system that establishes a monthly quota regardless of
revenue.

For example, parking attendants would pay 80 pesos ($4) a month, while
typing instructors would have to pay more than 100 pesos ($5) monthly,
and barbers would be forced to pay the highest fees at 200 pesos ($10) a
month.

Those not eligible for the simplified tax system - with jobs such as
taxi driver, plumber and rooming house operator - will pay a 25 per cent
income tax on the first 10,000 pesos ($476) earned each year, with the
rate rising for those who earn more.

Income exceeding 50,000 pesos ($2,381) a year will be taxed at 50 per cent.

State worker layoffs

The guidelines are part of a plan to deal with some half a million state
workers to be laid off by March 2011. Authorities announced on September
13 that the government would lay off 500,000 workers and absorb many of
them into the private sector.

The new rules will allow Cubans over the age of 17 to start their own
business, so long as they are permanent residents.

Cuba's inefficient economy, crippled by a US trade embargo for nearly
five decades, has been suffering for years, and the government of Raul
Castro has begun to allow an expansion of small-scale private enterprise.

Similar steps were taken in the 1990s as Cuba struggled to survive when
its economy collapsed after the fall of the Caribbean island's principal
benefactor, the Soviet Union.

In 1996, the number of self-employed peaked at 209,000, but when the
economy improved, the government, in the name of ideological purity,
backed off the reforms and restricted the issuance of new licences.

http://english.aljazeera.net/news/americas/2010/10/2010102643720407749.html

Cuba self-employed to pay taxes up to 50 percent

Cuba self-employed to pay taxes up to 50 percent
Reuters

By Nelson Acosta Nelson Acosta – Mon Oct 25, 1:41 pm ET

HAVANA (Reuters) – Cuba has set income tax rates at 25 to 50 percent for
its soon to be expanded private sector, with the biggest earners paying
the most taxes, according to official decrees published on Monday.

The rates will range from nothing for those making 5,000 pesos --
equivalent to $225 -- or less a year to 50 percent for those in the
highest bracket, which is more than 50,000 pesos, or $2,252.

The new tax rates came out in the Official Gazette as the government
prepares to cut 500,000 workers from state payrolls and issue 250,000
new licenses for self-employment to create new jobs in President Raul
Castro's biggest economic reform so far.

Those making more than 5,000 pesos will have to pay taxes, starting at a
rate of 25 percent and rising from there as income increases.

The cash-strapped government is looking to the self-employed to increase
tax revenues to help pay for expensive social programs such as free
health care and education.

Last week the government, in a story in Communist Party newspaper
Granma, warned that tax scofflaws "will feel the weight of the law
imposed upon them by those mandated to enforce it, the National Tax Office."

The gazette, where the government publishes in thick legalese its new
laws and decrees, is not usually a hot seller, but on Monday in Havana
people could be seen lining up at newsstands to buy copies, then quickly
leafing through them on the street.

INTEREST IN STARTING BUSINESSES

Many Cubans have expressed interest in opening their own businesses,
with the hope of earning more than the country's $20 a month average salary.

Currently, about 85 percent of the country's labor force of more than 5
million works for the state. Castro, who took over from his ailing older
brother Fidel Castro in 2008, wants to trim that number and cut costs.

As of the end of 2009, there were only 143,000 licensed self-employed,
although thousands more worked for themselves illegally.

Reaction on the street to the thick decrees, which came out in two
separate editions of the gazette, was mixed.

Antonio Soria, a shoemaker working for the state, said he intends to
start his own business and views it as a chance to help both himself and
the state.

"As a private shoemaker I can retire and have financial support for the
future," he said.

"This is a way to contribute to the state's income. Remember that health
care and education are free and now that we have the chance to have
small businesses, we have to help the country."

Transport worker Ibrahim Fernandez said he supports the private sector
expansion, but worried taxes will be too high to encourage small businesses.

"From what I've been able to understand, the topic of the licenses has a
defect, which is that they are overcharging taxes. Very expensive, the
taxes," he said.

In last week's Granma story, the government outlined a new tax code it
said was friendlier to small businesses because while it requires new
taxes, it also allows bigger tax deductions.

For the first time since Cuba nationalized small businesses in 1968, the
self-employed will be able to legally hire workers.

The regulations issued on Monday said they would have to pay a labor tax
amounting to 25 percent of the average salary for their work.

(Additional reporting by Esteban Israel; Editing by Jeff Franks and
Jerry Norton)

http://news.yahoo.com/s/nm/20101025/wl_nm/us_cuba_reform_taxes_1

Schwarzenberg: EU not to change stance on Cuba

Schwarzenberg: EU not to change stance on Cuba
ČTK |
26 October 2010

Luxembourg, Oct 25 (CTK) - The European Union will not change its
current stance on the Cuban regime though Cuba released some political
prisoners in the past weeks, the EU countries' foreign ministers agreed
Monday, Czech Foreign Minister Karel Schwarzenberg has said.

The EU will be willing to negotiate with Cuba only if human rights
protection improves in this country, he added.

The EU has practically not changed its stance since 1996 when it adopted
a common position on Cuba.

Spain, which wants the EU to normalise relations with Cuba, has
criticised this position in the long run.

However, a number of the member states stand up against the Spanish
view. The Czech Republic has been among the strongest opponents of
softening the EU policy towards the Cuban totalitarian regime.

The Czech Republic and Sweden, with support of Germany, Monday succeeded
in persuading most of the EU member states that not even the release of
some prisoners of conscience was a sufficient reason to mitigate the
stance, Schwarzenberg said.

Last week, the Cuban government approved the release of five political
prisoners who, however, do not belong to the group of 52 dissidents
arrested, along with another 23 regime opponents, in 2003.

These people are being gradually released prom prison on the basis of
the July agreement between the Cuban government and Spain which was
mediated by the Catholic Church.

http://www.praguemonitor.com/2010/10/26/schwarzenberg-eu-not-change-stance-cuba

Sakharov Prize recipient shows 'Cubans have a right to rights,' says dissident

Sakharov Prize recipient shows 'Cubans have a right to rights,' says
dissident

Havana, Cuba, Oct 25, 2010 / 10:04 pm (CNA).- The leader of the
Christian Liberation Movement, Oswaldo Paya, has offered his
congratulations to Guillermo Farinas, the recipient of the European
Union's 2010 Sakharov Prize, saying that the selection of Farinas proves
that "Cubans have a right to rights."

In a letter to Europe, Paya wrote, "Within Cuba we peacefully fight for
these rights and we hope to receive the solidarity of everyone so Cubans
themselves can bring about these changes in an atmosphere of
reconciliation."

Paya received the Sakharov Prize in 2002.

The Sakharov Prize for Freedom of Conscience is named after Soviet
dissident Andrei Sakharov. It was established in December of 1985 by the
European Parliament in order to honor persons or organizations devoted
to the defense of human rights and freedom."

http://www.catholicnewsagency.com/news/sakharov-prize-recipient-shows-cubans-have-a-right-to-rights-says-dissident/

Shock measures a la Cubana

Tuesday, October 26, 2010
Shock measures a la Cubana
Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

When Fernando de la Rua in Argentina proposed an agenda of fiscal
discipline and privatizations that copied the IMF's recipe, several
leftist sympathizers in Latin America had to be hospitalized due to
sudden heart diseases. Ironically, neither in the Domingo Cavallo's
Argentina, nor in the current indebted Greece, the IMF technocrats came
up with an economic program as ruthless as the one that the Cuban
government has been pursuing.

With words similar to that of Milton Friedman, the Cuban regime is now
talking about the need to eliminate "unreasonable expenses", but prefers
an economic policy that would embarrass even the father of
neoliberalism. 10% of the Cuban labor force was fired from its state
employment as a saving measure and thrown into the streets to survive at
its own, without social security, fixed income or solid legal guarantees
to start its own business. 500 thousand human beings who are also only
allowed to open small hair salons or mobile food sales, which means that
a whole mass of people will start, at the same time, identical
businesses to compete savagely in an archaic market with very little
money movement.

To make matters worse, as these people have been working during years
for a Marxist bureaucracy, they do not have the preparation or
experience needed to succeed in private businesses.

As if it was not enough, these new local micro entrepreneurs must cope
with the giants that come from outside the country, because Cuba is also
privatizing several sectors of its economy into the hands of
international private capital, with the hope to generate the development
that the communist government was never able to materialize.

And like most governments looking for help of the International Monetary
Fund, Cuba is forced to practice emergency measures once it is in the
brink of a more extreme economic disaster, resulting in traumatic
adjustments.

We can add the words humanism, socialism or global warming, which
combine better with a Leninist propaganda, but economically, what Castro
is doing is a grip so cruel that we do not remember having seen
something similar in any of the IMF's bailouts.

http://www.morochos.net/2010/10/shock-measures-la-cubana.html

Czechs grant asylum to Cuban political prisoner

Posted on Tuesday, 10.26.10
Czechs grant asylum to Cuban political prisoner
The Associated Press

PRAGUE -- Officials say the Czech Republic has become the second
European Union country after Spain to grant asylum to a Cuban political
prisoner.

The Foreign Ministry says Rolando Jimenez Posada arrived in Prague on
Tuesday.

He's one of dozens political prisoners Cuba's communist government
agreed to free on condition they leave the island.

Pavla Holcova of the People In Need human rights organization says
Jimenez Posada, a lawyer, was arrested in 2003 and received a 12-year
prison term three years later for subversion. Holcova said Posada
arrived with his wife, brother, son and niece.

The Czech Republic is one of the strongest critics in the EU of Cuba's
human rights record. The ministry says the country is ready to take 10
Cuban political prisoners.

http://www.miamiherald.com/2010/10/26/1891494/czechs-grant-asylum-to-cuban-political.html