TAXES FOR THE NON-STATE SECTOR
redistribution to benefit all
• The tax contributions of
private parties are allocated to cover social
expenses • The amount collected this year should
exceed that of 2012
Yenia Silva Correa
WITH self-employment becoming a more
common option in the country, the number of tax
contributors in the non-state sector, and their
importance to the state budget, have increased
Self-employed workers in food
preparation and sales - specifically paladares,
as private restaurants in Cuba are called - cafes,
the renting of homes and rooms, in addition to
passenger transportation are generating greater
income and, consequently pay higher taxes.
Nevertheless, a tax-paying culture
among new contributors has not developed on a par
with the growing number of economic activities which
are now being managed by private parties.
Questions about the use of funds
raised and the need to make a financial contribution,
in the amounts and at the times established, have
not always been addressed with sufficient clarity
for those who are entering this new economic sector.
Belkis Pino Hernández, director of
Attention to Contributors for the National Tax
Administration Office (ONAT) commented, "Income
coming from the non-state sector goes to the
municipal budget, to the benefit of the locality
where the self-employed worker is functioning. In
the Cuban state, income which enters the budget is
allocated to cover social expenses such as education,
public health, Social Security and Assistance,
defense, sports, culture..."
Given that funds contributed by self-employed
workers represent only 2% of the state budget's
income, state enterprises must generate a far
Yamilé Pérez Díaz, ONAT deputy
director, addressed this point, saying, "The non-state
sector is never going to exceed the state
contribution. It has been affirmed recently in the
National Assembly that the state sector is going to
predominate because, above all, we are socialists;
this is what is fundamental.
"It may be that this percentage
increases as new figures emerge, new activities and
inflated workforces [at state enterprises] are
"Another thing which is no secret:
there is a degree of under-reporting of the income
self-employed workers are generating. As the tax
administration is strengthened, when it can act in
an opportune fashion, income is going to increase,
because it will be detected when what is owed is not
paid, and the appropriate amount owed to the state
budget will be submitted.
What concrete measures will be taken
to address the issue of under-reporting of income?
"We must strengthen our work and
auditing teams. We are also cross-checking
information. This will help us conduct
investigations of contributors and specific
activities. It is not the same investigating a
paladar operator as a collector of recyclable
materials or a parking attendant; it depends on
having the zone identified. There are diverse
factors which characterize contributors. As ONAT
continues to be strengthened, it will be capable of
undertaking all of these investigations.
"A wholesale market is being planned
and what we most hope for is
receipt documentation, so that
expenses can be justified. As reliable receipts are
available for products used in an activity, income
can be estimated.
"There are many procedures and there
will be many forms. At this time, we are
strengthening our work to be able to make a
characterization of a zone, a province, a
municipality and of the contributor, so that
everyone pays what they should pay."
DEVELOPING A TAX-PAYING CULTURE
Economic and Social Policy
Development Guideline No.63 calls for "fomenting a
culture of taxpaying and the social responsibility
of the population... to fully meet tax obligations."
Thus the necessity of people
understanding the social responsibility they have in
terns of paying their taxes on time and in the
amounts established, as a way to contribute to the
Asked about contributors’ awareness
of the importance of their taxes to the country,
Yamilé Pérez Díaz said, "There are some contributors
who are aware of the destination of this income to
the state budget, which is ultimately for social
expenses, for education, health...
"There is another portion who are
not aware of this. We must work with them to foment
this culture of tax-paying. These contributors at
times even evade, or don't declare their income, or
don’t do things as they should because they are not
aware of their tax obligations."
An increase in tax collections from
the private sector has been projected for 2013,
although the portion of the state budget which these
contributions comprise will remain between two and
Equally important as the
redistribution of these funds to benefit the
community is the Social Security contribution of
every worker to ensure support to the individual and
his or her family in the event of illness or death,
as well as paid maternity leave.