On July 10, Cuba announced new regulations, effective December 7, 2018, designed to allow new private restaurants, bed-and breakfasts and transportation services.[1]
The new regulations are designed to control such growth and to collect more tax revenue from these businesses by requiring them to move all of their cash through state-run banks. A related objective is to reduce tax evasion and illegal purchase of stolen state materials.
The government also recognized that the work of the self-employed workers (TCP) has increased the supply of goods and services to the population with acceptable levels of quality, together with the payment of taxes, which are a source of income for the municipal budgets in pursuit of local development. In addition, the TCP sector has facilitated the reordering of the national labor supply and the reduction of inflated staff in the state sector and freeing the State of some productive activities and non-strategic services for the development of the country.
Cuba’s Deputy Minister of Labor and Social Security, Marta Elena Feitódo Cabrera, said, “there is no going back on work on its own; we must preserve this economic activity, but in an orderly manner.” She noted that while there were 157,351 registered self-employed workers in 2010, now there are 591,456, which constitutes 13% of the country’s employment.
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[1] Yudy Castro, Tax adjustments: Official Gazette publishes new regulations on self-employment, Granma (July 9, 2018); Yudy Castro, What changes with the new rules? (+ Videos), Granma (July 9, 2018); Update, correct . . . strengthen self-employment (July 9, 2018); The government decrees new taxes for the private sector in Cuba, Diario de Cuba (July 10, 2018); The authorities will lift the ban on the most coveted licenses of the Cuban private sector, Diario de Cuba (July 10, 2018); Issue New Provisions for Self-employment (+ PDF), Cubadebate (July 10, 2018); Assoc. Press, Cuba unfreezing growth of private tourism businesses, N.Y. Times (July 10, 2018).
Previous posts about Cuba’s private sector are listed in the “Cuban Economy” section of List of Posts to dwkcommentaries.com—Topical: CUBA.