Cuba to strengthen tax administration

News from Cuba | Monday, 22 August 2011

Cuba will strengthen tax administration to fight tax evasion and other illegal activities in the second half of the year, a tax official said Monday.

The National Tax Administration Office of Cuba (ONAT) will reassess and reorganize its audit work in line with the rapid growth in the number of self-employed workers as a result of the island country's economic reform, the office's deputy head Alberto Fernandez said.

Reassigning staff to supervise over 330,000 licensed self-employed workers has become a major challenge for ONAT in the year, since there has been virtually no tax audit of the individuals in the past five years, Fernandez said.

So the first step is to retrain existing staff and enlist new tax inspectors, he said.

Private sector workers will be required to keep a daily record of their incomes and expenditures, instead of making weekly reports according to older tax regulations, Fernandez added.

To boost the private sector, the Cuban government has lowered relevant taxes. Taxes paid by landlords for renting houses were reduced by 25 percent for the rest of 2011 and small businesses hiring one to five workers will be exempt from employment tax during the year.

After the 1959 revolution led by former Cuban leader Fidel Castro, citizens stopped paying taxes. Since two thirds of the country's 11 million population were born after the revolution and never paid taxes, ONAT now proposes to "rescue the culture and social discipline on the issue of taxes."

"Paying taxes is a way of contributing to the society," Fernandez said. "For many years we have been away from that idea and now we are trying to refocus on it."

The country banned all small private business in 1968 but legalized self-employment for about 150 occupations in 1993 amid an economic crisis.

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