Cuba Suspends New Licenses for Work in Private Sector

August 1, 2017 |

Starting today the opening of small private cafeterias is prohibited. Photo: Juan Suarez

HAVANA TIMES – The Cuban government has suspended indefinitely the issuance of new licenses to various types of previously allowed private employment, with the aim of “curbing tax evasion and violations of the law,” local media reported today.

The measure published in the Official Gazette affects private workers, known as “cuentapropistas”, in some sectors of great demand such as private restaurants and room and house rentals.

The Cuban authorities temporarily froze the licenses for other activities such as sales facilitator for homes, dressmaker, party organizer, sports instructor, repairer of electrical and electronic equipment or private tutors, among other sectors.

Those who already have the licenses will be able to continue operating. The government said the prohibition is “temporary” but in the future, no new permits will be granted for some forms of employment such as “wholesale seller of agricultural products”.

From now on, those renting lodging for tourists will have to create “a bank account with fiscal importance” [whatever that means], explained to “Granma” the Director of Revenues of the Ministry of Finance and Prices, Vladimir Regueiro.

Last month, Cuban President Raul Castro warned the national parliament of the need to “resolutely face the illegalities and other deviations that deviate from the established policy” for private work.

He cited as examples “the use of raw materials and equipment of illicit origin” and “underreporting of income to evade tax obligations”.

At the end of the first half of 2017, some 567,000 people worked independently of the Cuban state, just over 5 % of the total population.

“No one should assume that the purpose of these measures is to reverse the development of self-employment in Cuba,” said an article in the official newspaper “Granma.”

The Deputy Minister of Labor and Social Security, Marta Elena Feito, told the newspaper “Granma” that the measures seek to “correct deficiencies”.

“There have been cases where raw materials, materials and equipment of illicit origin are used, non-compliance with tax obligations persists as does under-reporting of income,” said Feito.

Share this:

What's your opinion?

  • Eden Wong

    What a joke.

  • Moses Patterson

    And so it begins….

    • Carlyle MacDuff

      The demise of Scenius demonstrates that Raul Castro as dictator is sticking to Stalin type communist thought. Initiative has to be eliminated. It is almost comical that having complained about “non-compliance with tax obligations” that an accountancy cooperative should be extinguished – Raul obviously doesn’t understand that accountancy records are a basis for taxation – or could it just be that Scenius in working with state organizations (see report) found evidence of corruption?

    • N.J. Marti

      Raul is running scared. And has now revealed weakness by announcement that restrictions are not permanent.

      • Moses Patterson

        I agree. However, socialists governments by definition are paranoid. Therefore, his decision to suspend private business licenses and them walk it back a little is just the latest manifestation of the historic paranoia that has existed since 1959.

  • Walter

    “Raw materials” like the thrown-away dregs of sugar cane that some entrepreneurs use to make candy and are then jailed for using “raw materials”. It’s happened.

    • Eden Wong

      I’ve been involved in a pile of business licenses and I’ve heard of that situation happening.

  • lavendula38

    I was saddened to hear this news. My 45 year old dream of visiting Cuba, as an American citizen, became a reality this year. I was impressed with the number of individually owned small businesses, in fact, there were so many casa particulars to choose from it was difficult to make a decision where to stay.

    I was fortunate to visit several different areas of Cuba during my 10 day stay. To the best of my knowledge, I only ate at one state ran restaurant. As much as possible I tried to spend my tourist dollars at ‘private businesses’.

    Unfortunately, tax evasion has existed all over the world since the beginning of taxation. Seems to me Cubans are being punished for possessing human nature. Even with America’s extensive IRS tax laws, people still cheat on their taxes. Believe me, as a bookkeeper for several small businesses, people are always looking for a way to cheat on their taxes. If they cheat enough they eventually get caught and pay the price.

    Instead of trampling on people’s dreams of bettering themselves, perhaps the powers that be should look at why people need supplies from the Black Market in the first place…and spend some serious time on this issue. And develop a better tax code than America presently has for Cuban small business owners.

    My travels throughout the world have taught me one thing. Humans are the same the world wide. You have honest people and you have dishonest people. It is unfair to penalize the honest, because of the dishonest.

  • Carlyle MacDuff

    The difficulty is that private businesses require individual initiative which runs contrary to communist purposes and policy.
    What a typical regime phrase: “non-compliance with tax obligations persists as does under-reporting of income”. It reminds one of the criminal offence of: “disrespect”.
    One cannot help wondering whether Raul Castro in considering: “other deviations that deviate from established policy” thought of finding a way of terminating any form of fun.

  • bjmack

    Perhaps Cuba’s answer to Trump’s Cuban’ policy. It’s insane and sad.