The Cuban government will increase the scope of "preventive embargoes" for debt collection.

The Cuban government announced that it will implement "preventive embargo" as an auxiliary measure to ensure compliance with tax obligations. This measure has been designed to address tax evasion, a topic that has been of great interest in recent months.

When presenting a policy proposal to strengthen the Tax System during one of the sessions of the Committee on Economic Affairs of the National Assembly of People's Power (ANPP), whose ordinary session took place this Wednesday, July 17th, Vladimir Regueiro Ale, head of the Ministry of Finance and Prices, reported on the expansion of the scope of preventive embargo.

The proposed policy includes measures such as expanding the scope of the preventive embargo to ensure the collection of debts; extending the definitions in the responsibilities of income tax withholdings, as well as establishing a minimum amount as a requirement to process refunds of improper or excess income, the official newspaper Granma mentioned in its report.

However, the official publication of the Communist Party (PCC), which argues the "need for a Tax Law adapted to the current economic scenario," omits the possible causes and consequences that will arise from implementing such a measure.

In this case, it is important to highlight that the "preventive embargo" is a precautionary measure that seeks to ensure the compliance of a taxpayer's fiscal obligations. This measure allows the tax authority to immobilize or retain the taxpayer's assets until the pending tax debt is resolved.

Some key points of this measure focus on ensuring the payment of tax debts that the taxpayer has with the tax authority. It also serves to prevent the debtor from disposing of their assets before the debt is collected.

The procedure to carry it out often does not require a prior court order. The tax administration notifies the taxpayer and relevant institutions (for example, banks) about the embargo.

Likewise, personal and real property, bank accounts, salaries, credit rights, among others, can be seized.

Its duration remains in effect until the taxpayer meets their tax obligations, either by paying the debt or providing the necessary guarantees.

It is important for the taxpayer to know that they have the right to be notified of the embargo, to challenge the measure before the competent authorities, and to submit evidence in their defense.

On several occasions, the regime has taken measures against tax evaders. In 2022, they restricted foreign travel and entry into the country for taxpayers with "significant" debts to the tax authorities until they settle their debts with the State. To do this, the ONAT signed an agreement with the Identification, Immigration, and Foreigner Directorate (DIIE) of the Ministry of the Interior, under the protection of Law No. 113 of the Tax System.

In mid-2024, the Government implemented immigration regulation preventing 200 people in Sancti Spíritus from leaving the country, as they allegedly declared lower incomes than they actually have.

Tax evaders have also been sentenced by the courts, as was the case in 2023 with two citizens from the city of Santa Clara.

A court in that city sentenced them for tax evasion in an amount that collectively exceeded six million Cuban pesos.

In the first four months of this 2024, the ONAT detected a tax evasion that exceeds 800 million pesos.

Among the irregularities detected are outdated, manipulated, or altered books, records, sub ledgers, and other models, cancellations of accounts receivable without documentary support, and non-declaration of contracted workforce.