Cuban Government Prepares New Rules to "Stop Illegalities" in the Private Sector

Up to May 2019, 605,908 self-employed workers worked in the 128 authorized activities. (Alfonso B.)

14ymedio bigger14ymedio, Havana, 10 July 2019 — Authorities will approve a new package of measures to “stop illegalities” in the private sector, Margarita González Fernández, Minister of Labor and Social Security, announced Tuesday during a session of the National Assembly of People’s Power.

The official explained during, a meeting of the Parliamentary Committee on Economic Affairs, that the new rules will tackle “illegality with impunity” that “provokes discontent among the self-employed who do comply with their obligations and see that in their environment there are others who violate the provisions”.

The notification of these regulations, the details of which have not yet been specified, comes a few days after the Government announced a package of economic measures that include a salary increase and greater internal flexibility in state companies.

In what is considered as an attempt to prevent inflation, both President Miguel Díaz-Canel and Economy Minister, Alejandro Gil Fernández, called on citizens to denounce merchants who raise prices after the increase in salaries. A list of products with their corresponding prices was published, as a guide for consumers to demand compliance from merchants.

Now the Minister of Labor and Social Security has joined those appeals and blames many of the illegalities that are committed in the self-employed sector on the fact that citizens “look away and don’t confront them in a timely manner. “

Among the illegalities mentioned by the official, is the sale by private merchants of “products imported or coming from the national trade network” — that is the sale of products stolen from the state. Since December 2013, the Government has banned the sale of imported clothing and footwear and other merchandise from state stores.

Merchants’ stands, as they are known, are in high demand, especially because they offer household supplies, toiletries, disposable batteries, scouring pads and a wide range of plastic goods that merchants often buy in bulk and then sell at retail.

As of May 2019, there were 605,908 self-employed workers in the country in the 128 authorized activities for which licenses may be grated, explained the minister. Havana, Matanzas, Villa Clara, Camagüey, Holguin and Santiago de Cuba, account for 65% of the total non-state labor force, which has grown in the last decade but is still a small share of total employment.

In the first five months of this year, there were 185,000 new license registrations in the sector, especially in activities related to the preparation and sale of food, transportation, beauty services, producer or seller of various items, and contract workers.

But there were also 77,522 licenses canceled, mostly in the areas related to food services, masonry, beauty services and hired workers. This figure includes both workers who decided to cancel their permission to work in the private sector, and those whose licenses were canceled at the request of the National Tax Administration Office (ONAT) for non-compliance with tax obligations.

The ONAT reported 41,311 self-employed workers with defaults in their tax obligations, most of them in the capital, Matanzas and Las Tunas. In that period, more than 43,000 bank accounts were also opened, with a total of just over than 84 million pesos; more than half corresponding to lessors of houses, rooms and premises.

So far it is not clear whether, in the parliamentary sessions of this week, there has been debate about the demands that the private sector has pushed for years, including a reduction of taxes, the legal capacity to import and export directly and the access to wholesale markets with truly preferential prices.


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