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Thu Dec 18 16:21:57 CAT 2014

The taxman cometh in Red Cuba

Reuters | 29 November, 2012 00:34
Cuba's President Raul Castro g
Image by: DESMOND BOYLAN

Most Cubans have not paid taxes for half a century, but that will change under a new code starting on January 1.

The landmark regulations will change the relations of Cubans with their government and are a signal that market-oriented reforms, launched since President Raul Castro succeeded his brother, Fidel, in 2008, are here to stay.

The recently published code constitutes the first comprehensive taxation in Cuba since the 1959 revolution abolished just about all taxes.

In the 1990s after the collapse of the Soviet Union, the country's main benefactor, the Cuban government imposed a few scattered taxes, but mostly preferred to maintain low wages so it could fund free social services.

The government's free market reforms, introduced over the last two years, are designed to encourage small businesses, private farming and individual initiative, along with plans to pay state workers more.

It means the largely tax-free life under a paternalistic government is on its way out.

The new code covers 19 taxes, including such things as inheritance, environment, sales, transportation and farm land and various license fees.

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