Monday, December 26, 2011

Tax relief for entrepreneurs, and other economic news

Cuban entrepreneurs will have their income tax reduced in two ways, former economy minister and current vice president of the Council of Ministers Marino Murillo announced Friday in the National Assembly.

One tax cut comes not in the form of reduced rates but rather through an increase in the amount of income that is exempt from tax. Currently an entrepreneur’s first 5,000 pesos in income is tax-exempt; this amount has now been doubled to 10,000 pesos. That amount is nearly twice the average salary of a state sector worker (5,376 pesos per year). See story in Trabajadores.

Murillo also announced that the tax that entrepreneurs pay for each worker that they hire will remain suspended for those employing five or fewer employees. This tax was suspended last May as part of a series of measures to encourage job creation.

Other economic tidbits from the presentations of Murillo, Minister of the Economy Adel Yzquierdo, and President Raul Castro before the National Assembly:

  • Cuba expects to import 117,000 fewer tons of rice in 2012, 45,000 fewer tons of grain, and 2,000 fewer tons of powdered milk in 2012, all due to increased domestic production.

  • Employment is expected to grow by 70,000 in 2012 based on forecasts that the government will shed 170,000 from its payrolls while 240,000 jobs are created in the “non-state” sector.

  • The government is working “at an accelerated pace in the proposal for policies and transitional measures” for the creation of non-agricultural cooperatives. (Murillo)

  • A legislator from Mayari asked what can be done for state enterprises that have run out of working capital, and got some tough love from Murillo: the solution is to figure out why they are losing money and make them stop. Also: “The central government budget should receive money from the enterprises, not the other way around.”

  • Growth was 2.7 percent in 2011, an “acceptable and sustained” pace (Raul); 3.4 percent is expected for 2012.

  • The bank accounts of foreign companies that had been frozen have now been un-frozen, all of them. The freeze, a response to a liquidity crunch, prevented businesses from repatriating revenues and profits. The action is part of efforts aimed at “re-establishing the credibility of our economy.” (Raul)

1 comment:

Anonymous said...

Very informative, thanks.

What is shameful is how USA is denying any real changes on la isla. denying the reality of the most dramatic reforms , perhaps, since the 1960s.

Meanwhile, USA, including OBama on interview with univision, seem to act like babies - denying any improvement in Cuba b/c its not they changes 'they want'.

The folks in southern florida will never be satisified (not even with elections) unless their person gets complete control over the island. Similar attitudes can be seen their stance/ideology toward VZ, NICa, Ecuador, Russia, Eastern Europe and USA (when their guy doesn't win, its a fraud). The babalu types seem to hate 40-60% of Venezuelans, Bolivians, Ecuardorians (and perhaps even russians). Its never enough for them.