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realclearworld

Reports from Cuba: The Tax Man and his Aladdin’s Lamp

By Gladys Linares in Translating Cuba:

The Tax Man and his Aladdin’s Lamp

HAVANA, Cuba. — In 2010, Elvira was dismissed from her workplace. She had no option other than to get a license and open a snack-bar in her home in order to support her mother and son. She started selling coffee, soft drinks and sandwiches. She remarks that working for herself was more convenient, and she believed that she owed nothing to anyone because every month she duly paid her taxes.

Nevertheless, when she heard talk for the first time about the sworn statement about personal income as part of the “perfection” of the Cuban economic model, she never imagined what would happen to her: one fine day, they notified her that she owed nine thousand pesos national currency in debt to the tax authorities, and 500 in fines for fraud in her sworn statement, a total of 380 CUC [around $400 USD, close to two year’s average income in Cuba], hard currency and unattainable.

On inquiring at the Office of National Tax Administration (ONAT), the responses she received left her bewildered.  According to the official, in order to monitor the sworn statement, they consider the work hours, quantity of products sold and their prices, as well as the place where the snack-bar is located.

Elvira asked how they could know all that, and the worker replied that the evaluation might be direct or indirect.  ”You may know that we observe you, but equally we have the option of evaluating you without your knowing.”  And she added that if she did not agree, she could complain.  Elvira, getting to her feet, told her: “I see now that you all get information from Aladdin’s Lamp.” Today she is thinking of turning in her license and working under the table, but first she must devise a way to pay the debt.

Private taxi -- photo Gladys LinaresA carrier who did not want to reveal his name said that he turned in his license more than three months ago because “the streets are in a very bad state, and I barely earned enough to buy tires and fix the car.”  In spite of that, a short while ago they notified him of a tax debt of 30 thousand pesos national currency, some 1,200 CUC.

One of the topics that lately has caused a commotion among the people is the great quantity of money the self-employed have to pay by way of taxes and fines.

Julio, an honest and enterprising neighbor, closed his private restaurant and turned in his license some time ago. He says that when the matter of the sworn statement about personal income began at the end of the year, he did not understand why, if all those months he paid 10% of his income, he had to pay again at year’s end.

“Marino Murillo said,” complains Julio, “that the payment to the tax system is to diminish the inequalities among the citizens. And I say what must be done for that is to take away privileges from the leaders, officials and their families, who are the ones who live well in this country, at the expense of Cubans.”

Cubanet, February 27, 2014, 

Translated by mlk.

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