Cuba Formulating New Tax System For Independent Economy

According to the October 22, 2010 Granma issue of Cuba, in order to adapt to the current situation,

Tax should be paid by Cuban peso.

The individual operator who provides goods and services through the convertibility Peso shall pay taxes after converting the convertible pesos into pesos at the current exchange rate.

The new tax system stipulates that a simple tax system can be adopted for small and relatively simple businesses.

Individuals who are allowed to engage in single individual business activities and do not hire workers will be allowed to pay a certain share of tax each month.

This will enable qualified individual operators to liquidate their personal income tax by the end of the year.

The Cuban Ministry of Finance and price stipulates the minimum monthly share of personal income tax, and the government of Cuba can raise this share as appropriate.

However, individual operators who are engaged in more complicated or involving larger amounts need to liquidate personal income tax.

The calculation method is to deduct the sales tax up to 40% from the annual income of the self-employed person.

Individual operators who engage in commodity sales or labor services need to pay 10% of their sales tax or public service tax monthly.

The individual operators of wage labor should pay 25% of the "labor use tax" for their employees.

The contract workers who calculate the "labor use tax" can not be paid less than 1.5 times the average wage of each district. This will effectively avoid excessive concentration of wealth.

Individual operators who earn more than 50 thousand pesos (US $2300) a year must accept the audit of the simple accounting system and open accounts in the bank. The individual operators who earn less than 50 thousand pesos will need to register their income and expenses.

The tax paid by individual operators will be included in the budgets of various places for local economic development.

"Social insurance premium" is paid according to the needs of individual business people, and the rate is 25%. of their income, which will be used for social welfare such as retirement, medical care and education.