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Because they are so few, they are mostly anecdotal, although in theory, there are Financial incentives Private Entrepreneurs Therefore, they develop from the initial stage and contribute to the national economy. Recent new regulations The provision of “regulation of non-state economic actors” has disappeared, as have even the smallest provisions that could be interpreted as aid to the sector. And, as the press release accompanying the official decree attests, “ Tax Benefits “They have to be temporary, to stimulate economic activity or sectors.”
But this reasoning is, of course, wrong. Tax Benefits They “should not” be temporary. They may or may not be based on whether the objectives they set have been achieved, which, in the case of Cuba, are to promote the quantitative and qualitative development of emerging economies. Private Enterprise As a complement to the state sector, as defined by the liberty-depriving and impoverished Castro Constitution that millions of Cubans voluntarily voted for.
Are the less than 20,000 approved Lilliputian enterprises enough for the country’s development? Comparing this number with the number of similar enterprises operating in countries with a population comparable to Cuba is questionable. More importantly: Private sector Has its role as a supplement to the state been saturated? Seeing the terrible state of the “main economic players” (Castro’s companies), it is hard to believe that they do not need more private “supplements”. Because it is the latter that temporarily prevents desperate people from resorting to cannibalism while they wait for the seven eggs, chickens for fish and other food that the socialist revolution has achieved in 65 years.
It is obvious that The small Cuban private sector still needs all the stimulus and help it can get to proliferate.because although this sector has saved the country from total collapse, it is small, poorly diversified and poorly integrated. But it is also clear that its development and all the positive effects it could bring are not the goal of the island’s owners. On the contrary, in the new legislation “the main tax adjustments are in line with (… ) the growth of the income levels of non-state economic entities and self-employed persons”. In other words, Cuba’s private sector is already too big by Castro’s standards And not only does it not need help, it should be pruned with higher taxes.
He has grown so much. Cuban private sectorAccording to the Castro regime in its official communiqué, “More than two years after the process of creating the regime began MEMSwhich have demonstrated contribution capabilities and are necessary Increase national budget revenue“.
yes For the Castro regime, any company that earns a “lucrative” 500,000 Cuban pesos ($1,562) a year is great.anyone earning up to $130 a month is now “obliged to account for their business for tax purposes in accordance with Cuban financial reporting standards.”
Use revenue levels rather than profit levels as a metric Blaming Cuba’s private sector for excess prosperity And then, from there, take away the minimal assistance he has and make him pay more taxes, Another way Castroism benefits inflation Create and continue to expandAt the same time, he pretended to oppose this in his speech inflationquietly sheltering behind repressive institutions and a disorganized civil society, they are impoverishing society at a forcible pace, but so far this seems to have had no political impact.
However, “revenue” is very different from “profit”, which is what really matters financially. The link between the two terms is “production cost”, which, with inflation, will tend to rise more than the selling price, so even if they sell more expensively and make more money, companies can see their profits dwindle to the point of bankruptcy.
And profit margins do not grow at the same rate as prices and incomes. The government knows this, so using income instead of profits as a tax base is an attack on the very existence of thousands of companies that (due to the inflationary policies maintained by Castroism) are forced to raise product prices to cover costs and increase risk. Now, some companies are being punished for actions that Castroism forced them to take in order to survive.
Use income as a measure of prosperity to make decisions Is the private sector ready for fiscal austerity? Rather than need Tax assistanceis to use the inflation that has already hit these companies to hit them further. Because if prices go up across the board (inflation), incomes must also go up, and even a shoemaker will make more than 500,000 pesos a year. This does not mean that the shoemaker becomes richer or makes more profit.
Ultimately, the reason for these measures by the Cuban regime is nothing more than the bankruptcy of the Mafia, which, despite owning the vast majority of the means of production in the country, does not know how to manage them. A Mafia that, after destroying what it stole from its previous owners (plus everything it received as gifts from its foreign accomplices), It was decided that within a few years the Cubans would be deprived of the little that the private sector allowed them to do.And it needed to be done without attracting too much attention, lest the word spread that Castroism was weak and moribund. Deceiving those who still want to invest exist Cuba Under the guidance of the misery-makers who led them into exile, they will stop doing so and wait for better times. Castroism promises: There will be no better times on this island.
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