![]() Havana, Friday, October 28, 2011. Year 15 / Number 301 Self-employment: A year of flexibility and extension ANNERIS IVETTE LEYVA and YAIMA PUIG MENESES A CubaNews translation. Edited by Walter Lippmann. ![]() Lala is so happy teaching the little ones her granny secrets that she was among the first to register as a child care person when the law gave her the right to do so. Marta Ceballos Vita feels equal happiness and trust when she deposits her daughter Elizabeth in Lala's caring hands. In their own different ways these three Cuban women receive the benefits of the measures approved last year to extend self-employment and make it more flexible. The main objective of the update of our economic model is to guarantee the continuity and irreversibility of socialism. In such a goal authentic Cubans, such as this child care provider, get involved when they opt for self-employment. It is not by accident that Guideline No. 2 of the Social and Economic Policy passed by the 6th Congress of the Party acknowledges and promotes, together with the state-owned socialist enterprise as the main sector of the national economy, usufruct, leasing, self-employment and other modalities. As President Raúl Castro Ruz said at the Plenary Meeting of the People's Power National Assembly [Cuban Parliament] last December, these formulae represent a structural and conceptual change "aimed at preserving and developing our social system, and making it sustainable in the future", NON-STOP GROWTH By eleven o'clock in the morning of October 25th, 2010 the newspaper stands and post offices had sold out more than 50 thousand copies of the Gaceta Oficial that printed the norms concerning the extension and flexibility of self-employment regulations. To get their copies lots of people lined up, some because they simply love to be up to date, but the majority seeking how to implement an individual project that would also have a collective benefit. One year after that day, the results speak for themselves: the number of persons registered for this modality has more than doubled. According to information given by Idalmys Alvarez Mendive, Director of Employment at the Ministerio de Trabajo y Seguridad Social (MTSS), [Ministry of Labor and Social Security] the number of self-employed persons registered until September 30th was 338,280. This represents an increase of 181,000 when compared to the same date last year. A rough estimate - undoubtedly conservative by today's standards - had calculated 100,000 newly authorized permits by the end of 2011. However, this estimate became fact as early as January 21st! Since then, "not a single month has gone by without steady growth" and this process has been positive from all points of view, José Barreiro Alfonso, Deputy Minister for Work and Social Security, said to Granma. Even when some have given up or changed one activity for another, many more have decided to start or remain in the sector. They are now aware that today it is not possible to become and remain self-employed without a good knowledge of the task and quality needed. Thus, the increased figures in the sector represent both an undeniable diversification and improved products. In all provinces there is a notable increase in the marketing of goods and services, together with a boost of busy boulevards and a variety of colorful advertisements, but La Habana, Matanzas and Villa Clara show the largest numbers of self-employed. The contribution of self-employment as a source of employment is also outstanding: more than 65% of the authorized self-employed had no previous employment, according to data provided by Alvarez Mendive. The list of most representative areas of self-employment has transportation of cargo and passengers on top with 54,`675 registered, followed by food processers and sellers (51,461) and in the third position: hired workers (42,205). Life adds complexities to each new experience and these activities need systematic follow-up and efforts to detect what could require a new assessment. Therefore the Ministry of Labor and Social Security authorities insist that the different territories carry out comprehensive analyses to design strategies that would adapt to the requirements of each environment. In fact, the opinions of the self-employed persons have provided useful information for the process of readjustment carried out this year aimed at achieving a better relation between the social and economic environments in each territory. From the determination of having "ears and feet solidly on the ground" have emerged measures, such as those passed last September, to continue making the activity more flexible. Among other details, the number of authorized activities for self-employment increased from 178 to 181. Included were those of granite layer, insurance agent and planner of weddings and parties. Likewise the modality of carretillero [cart or wagon handler] was changed to agricultural products ambulatory salesperson. Decreto-Ley 284, which modifies 278, increased over ten years the retroactive payment of Social Security contributions - previously this was to be done in two years. Furthermore, women older than 60 and men older than 65 were exonerated from the compulsory affiliation with the Special Social Security System. The new regulations extended to all activities the option to hire other workers. Together with this decision the payment of taxes on the Use of Labor Force was waived to those who only hire five or fewer persons. It was also approved that processers and sellers of food and beverages providing gastronomic services - popularly known as paladares - can have up to 50 seats, thus increasing by 30 the number of seats previously authorized. House owners who rent and transporters can request a freezing of their licenses from 3 to 6 months to carry out repairs that would force the interruption of the activity. This way, in keeping with the policy followed since the beginning of the update of our economic model, each measure is well-studied to make the necessary adjustments so that what is approved is adequate for the context and the environment of application. TAXATION UPDATES Raúl Valerino found a "Talisman" between Bruzón and Almendares streets in the capital, but he didn't keep it for himself. The coffee shop he opened with this name seven months ago multiplies the gastronomy options in the area and guarantees a stable income to the economy of several families. He does not play "tricks" on his customers, but respects them and does a serious job. The "sortileges" of this Talisman include a delicious and strong Cuban coffee. The intense business of the coffee shop provides employment for Sara de los Reyes -- formerly just a housewife who now earns her own salary - and young José Ramón González (28). It also allows Daysi Viña, a divorcee with a teenager son, to receive a monthly payment for the rent of her porch. Of the income made there the State Budget also receives benefits. With the development and implementation of self-employment, it was necessary to begin the application of a more coherent tax regulation -- based on the principles defined in 1994 by Law 73 of the Cuban tax system. "In its design, the principle of generalization of tax payment was taken into account. This means that every person who carries out a taxable activity is compelled to pay the corresponding tax. However, depending on the circumstances, the basis for the taxation can be modified. This allows for a greater tax equity and fairness, because each contributor pays according to its economic capacity," Meisi Bolaños Weiss, Deputy Minister for Finances and Prices explained to Granma. Logically, the increase in self-employed workers also increases the contributing capacity of the sector. Their payments help increase state income to cover expenses of public health, education, sports and other social benefits. To give an idea of what this has represented in terms of income for the State Budget suffice it to say that at the end of last August the amount collected was three times the amount collected in the same period of 2010, the Deputy Minister for Finances and Prices explained. Among other aspects, the new tax regulations include the creation of a simplified tax collection procedure that allows a group of activities to pay their taxes in an easy way. Likewise it considers the payment of personal income tax, on sales and public services, and the payment of a Contribution to Social Security for all self-employed workers who do not receive it or do not have a [state related] work link. "The update of our economic model and the central role of tax matters demanded a great preparation of the staff in our tax management offices, not only because of the advice they have to provide to people who were already self-employed, but also because the novelty of tax terms and procedures for people who decide to undertake this type of employment." Bolaños Weiss acknowledges the increase of tax culture on the part of contributors and the population at large. "Today there is more familiarity with these terms in our country, but still there is a long way to go and a lot to do. Apart from knowing where this income goes, people also need to know how to pay it, to whom, what their responsibilities and duties are," explained the Deputy Minister. The improvement of the tax system must lead to more personal assistance to the contributor and a strengthening of fiscal control. These depend not only on how much our staff know about the regulations and mechanisms of the control system, but also on how much they know about the particularities of the contributors and the performance of the different activities in their territories. What are the main actions developed to contribute to increasing the tax culture of the population? Firstly, we have launched an information program. It's important to stress that this involves not only the national news media, but also the local media with which we have a special link. We also work together with the Ministry of Education in the creation of syllabi to include tax culture in the different levels of education, declared Bolaños Weiss. This year, and following the practice of studying the behavior of each measure applied, we have made modifications related to tax matters. An example is the reduction of the minimal monthly payment for renting rooms that decreases from a former 200 to 150, be these in CUC [convertible pesos] or CUP [Cuban pesos] according to renting modality, the Deputy Minister added. In like manner, she mentioned the decision to consider as deductible expenses up to a 40% of the annual income of coachers, and the reduction of their minimal monthly payments from 150 to 100 pesos - accountable to their personal income tax. FACILITATING HOW, WHAT WITH AND WHERE The attention paid by the Cuban government to the development of self-employment activity, has included not only consideration of the "how", but also of the "what with"as much as possible. To this end 122 million CUC were allotted for supplies in 2010. Although the situation of our economy does not allow for the short-term creation of a wholesale market for this sector, the retail network has tried to supply as best as possible the increased demand, and has offered new and varied products. Tomato, fruit and vegetable preserves, pasta sauces, mayonnaises, soft drinks and wines, cheeses and spices in larger containers and packages can be bought in 310 markets in the country where the population makes its purchases. Aldrey Taboada Monzón, Head of the Grupo de Comercio Mayorista de Productos Alimenticios del MINCIN [Group for the Food Products Wholesale Marketing of the Ministry for Domestic Trading], explained that among the newly-available commodities there are products that were rationed in the past such as eggs and sugar - brown and refined - and their "free" sale has been widely welcomed. Retail stores have resumed the sale of a number of electrical items such as air conditioners, showers, hot plates, ovens, warmers, frying pans, grills, roasters, sandwich makers, coffee makers and deep fryers. The marketing of these and other equipments and products has been considered in the outline of the plan for 2012, thus the offers will be closer to meeting consumer demands, explained Taboada and added that this year has served mostly for market exploration. Products such as chinaware sets, glassware, napkins, grease removers, tools for locksmiths, masons and ceramists, haberdashery (buttons, pins, lace) among others are already for sale or will be for sale soon, said Siuriz García Alonso, Head of the Grupo de Comercio Mayorista MINCIN [Wholesale Marketing - Ministry for Domestic Trading] in charge of this range of products. Simultaneously, and to avoid possible damage to the public environment which this rapid growth of self employment may bring about in the different localities, an experimental study in the capital has been initiated to detect state-owned facilities that are not in use or are underused. The idea is to rent these facilities to the self-employed workers who wish to do so. The aim is to achieve a better inner-city organization while solving the problem of those self-employed who have no space to carry out their activities, mostly of commerce, gastronomy and services, explained Ada Chávez Oviedo, Deputy Minister for Domestic Trading. She added that although the study has not yet been completed in the main areas of the city, some facilities have already been rented to self-employed workers. This has proved a good solution. "We now have a better and safer place," declared several workers interviewed by Granma. The State also wins because these facilities, previously bound to deterioration, are put to good use and generate rental income. And so, a year after the regulations for self-employment were made wider and more flexible, many prejudices regarding this modality have disappeared. Its existence benefits everybody and, under State supervision, its everyday performance shows our Socialism moves along its own path. [1] Translator's Note - Reference to Camilo Cienfuegos, a hero of the Cuban Revolution. http://www.granma.cubaweb.cu/2011/10/28/nacional/artic03.html |
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