On Monday, Cuba released a short two-page introduction to the wide sweeping tax reforms the country plans to implement, the allnewswire.com site reports.
After laying off over half a million government and state workers the country will introduce a tax system for the expected influx of newly self-employed persons. The goal of the country’s plan is to turn many of the laid-off workers into self-employed entrepreneurs. However, the few concrete details offered in the two-page article in the Communist Party newspaper Granma has left many wondering if new businesses will be able to succeed under the new tax code.
According to the code described in the paper, many self-employed Cubans will end up paying nearly a third of their income to the state in taxes. Self-employed persons creating businesses that employ others would pay an even greater percentage.
In a country used to receiving food, education, and medical care free, the wage taxes will be a new and often confusing development. Cubans running a business selling goods or services will pay a ten percent monthly tax on income and an additional 25 percent tax for social security. The social security tax will be used to fund pensions of workers and employers. Business owners who hire employees will also pay a 25 percent payroll tax. Taxes for businesses will also increase with the number of hired employees. Few details of the escalators were offered in the release.
The economic reforms being taken by the country are the most significant changes made to economic policy since the early 90’s. The new tax code will allow people to become self-employed in 178 areas of industry.
For the original report go to http://www.allnewswire.com/cuba-introduces-new-self-employment-opportunities-and-taxes/
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