New regulations for self-employment in Cuba

The implementation of fiscal bank accounts, which must "have a minimum balance equivalent to three monthly taxpayer payments," is one of the regulations included in the five decree laws, one decree and the 14 complementary resolutions

Restaurante La Vitrola © CiberCuba
La Vitrola Restaurant Photo © CiberCuba

This article is from 5 years ago
The Cuban government announced this Monday in its official press channels the implementation of “20 legal norms grouped in several decrees, as well as 14 complementary resolutions” to regulate the exercise of self-employment on the Island. Protected by Law No. 113, Of the Tax System and born to reduce "deviations related, fundamentally, to the use of raw materials of illicit origin, as well as non-compliance with tax obligations and under-declaration of income" -according to information published in the official Granma- introduced tax adjustments, included in the Extraordinary Official Gazette No. 35. of this Tuesday, July 10. Although the first vice minister of Labor and Social Security (MTSS), Marta Elena Feitó Cabrera, has recognized that self-employment has influenced "the labor reorganization and the reduction of inflated workforces in the state sector and, in turn, has gradually contributed to freeing the State from some productive activities and services that are not strategic for the development of the country", has increased the supply, improved the quality of services, and the payment of taxes; - the vice-head of the branch clarifies - the aforementioned deviations arose that led to the temporary suspension in 2017 of new authorizations "for 27 of the approved activities" and have led to the new regulations for the exercise of these activities. Within the main sections and Points included in the new regulations include: Tax regimes, monthly fees and deductible expenses for the activities that are grouped. “Of the 123 activities that were approved after the regrouping, 52 will contribute under the General Regime and 71 will contribute under the Simplified Regime. , which consists of the monthly payment of a consolidated fee,” reported Granma. The minimum fee in the capital increases in 41 of the integrated activities and in the rest of the country to 20 of them. "These increases range from five to 360 pesos, although in the last range barely 2% of the TCPs are located." At the same time, "the minimum quotas are reduced to 39 activities and only 22 in Havana." In the case of the Taxpayers who leave and subsequently return "to the same activity or another of similar scope" in a period of less than 24 months "will be set, in agreement with the manager, the fee they had before the cancellation." use of workforceAccording to the General Director of Fiscal Policy of the MFP, the main novelty at this point is the elimination of “the exemption from paying taxes for hiring up to five workers, and at the same time the minimum tax base for payment is adjusted of this tax, whose tax rate continues to be 5%.”GranmaImplementation of the fiscal bank account“It will make the financial management of the TCPs transparent and, initially, it will be mandatory for those who provide gastronomic, construction services, leasing of housing, rooms and spaces, as well as the transportation of passengers in motor vehicles (from four to 14 seats) in Havana.” A minimum balance is established, which must coincide with “three monthly taxpayer payments.” Through this account “all financial operations related to the activity must be carried out.” There will be 30 days after being “notified by the National Tax Administration Office (ONAT)” to open the account and 90 days to “cover the minimum balance.” "Simplified regime for telecommunications agentsFor those who "obtain monthly income up to 2,500 pesos, the fixed monthly fee of 20 pesos will be maintained, which can be increased by municipal governments up to 75 pesos." When monthly income exceeds 2,500 pesos Quotas will be applied following the following table.GranmaRestructuring of current activitiesAs the note published in official media points out, none of the previously authorized activities are eliminated, but rather they are grouped into 123, compared to the previous 201. Additionally, the three new ones were created activities: “bar and recreation service, sweet baker, and transportation rental company.” The above is a direct consequence of the irregularities detected in the past of establishments conceived as restaurants or cafes that also functioned as clubs or nightlife centers. This new activity, which "emerges from the activity of gastronomic services in restaurants", will allow, As reported by the First Vice Minister of Labor and Social Security (MTSS), “offer alcoholic and non-alcoholic beverages in their natural state or in cocktails, as well as light foods,” in addition to having “recorded music, projection of musical audiovisuals or presentations by artists.” professionals", within the rules and procedures established by the Ministry of Culture.Temporary suspension of the exercise of the activityThe new regulations contemplate, as we announced days ago, the temporary suspension of the exercise in circumstances such as the following:- It may be granted for a period of six months to motoring instructors, transporters and lessors of means of transport to repair the vehicle.- To carry out conservation and remodeling actions of the property: lessors of housing, rooms and spaces; assistants for educational care and childcare, as well as those who offer bar and recreation and gastronomic services in a restaurant or cafeteria.- To work as a lay judge. Likewise, the transfer of the fulfillment of the duties of the holder to someone is contemplated. of his contracted workers if he needs to be “absent due to a trip abroad or due to prolonged illness of himself or his family members.” This measure responds to an old claim by the TPCs that they had to close their premises or suspend activity, for example, when they went abroad. Authorizations to carry out only one of the approved activitiesAlthough they recognize that this measure may seem inflexible, it responds, as they explain, responds to the fact that “before you could obtain several licenses”. The 9,657 TCPs – 1.6% of the 591,456 in the country – that have “more than one authorization in the activities that were not integrated”, have “90 days after the entry into force of the Regulation, so that they go to the entity that issued the authorization, for the purposes of making the corresponding modifications and choosing which license they will continue with and which one they will cancel. GranmaOnly one of the activities will be authorized at the same legal address. following”: gastronomic service in a restaurant; gastronomic service in a cafeteria and bar and recreation service. Licenses that will no longer be granted According to the official Granma, “the decision not to grant new authorizations for the following activities is ratified; wholesale and retail seller of agricultural products; recreation equipment operator (for rustic equipment); forklift driver or seller of agricultural products on an ambulatory basis, buyer and seller of records “Simplification of control mechanisms” Having different inspection bodies visit the same places in short periods of time is counterproductive and should not be allowed. Hence, each territory must organize, in detail, its inspection," the vice minister acknowledges. In this sense, the aim is to correct the legislative dispersion that existed. The sanctions will be in accordance with the magnitude of the violation and include “from the application of fines to the definitive cancellation of the license.” Passenger transportation Among the new developments is “the granting of the Transport Operation License (LOT) for auxiliary and related services, which will be granted one time free of charge. In addition, the municipal, provincial and national extension of this license is restored (today all have national scope). “It will be an essential requirement to have a driving license for the means of transport in question and more than three years of experience as a vehicle driver. motor if “services in buses, vans and trucks” are provided.Experiment in the capital: public passenger transportation service“The implementation of an experiment was approved that includes more than 6,000 license holders, who offer services by car , jeep, panels and minibus with a capacity between four and 14 seats” which consists of “ordering the passenger transportation service in a system of 26 bus stops with 23 associated routes, which was ordered by the Board of Directors of the capital.” Participating in it will be an essential requirement to “open bank accounts associated with a magnetic card to carry out payment transactions with state entities”. An obligation of a minimum annual consumption of fuel acquired by magnetic card will be established. Those who take part in the experiment will have the following sales prices per liter: Diesel-2 CUP, Motor Gasoline-10 CUP, Regular Gasoline-13 CUP and Special Gasoline-16 CUP.Those who do not take advantage of this pilot experiment in the capital will have the same obligation to minimum fuel consumption, which they will acquire at a retail price according to the type.Entry into forceThe 20 legal regulations grouped in several decrees, as well as 14 complementary resolutions to regulate the private sector on the island will come into force 150 days after their publication in the Official Gazette. At that same moment "the delivery of authorizations will be restarted for the 27 activities that are currently limited." Access to the new regulations, as announced, "will be available in digital format on the Official Gazette site and it will gradually go on sale, in its printed version, starting next January 1st. of August".

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