Discontent Over High Taxes On Private Work
In the vicinity of Fraternity Park, near the Capitol in the heart of Havana, private taxi drivers passionately debated new regulations to self-employment.
They’re mad. Carlos, owner of a dilapidated 1949 Ford, flies into a rage. “I have to take it in stride, because it could give me give a heart attack. It is unfair that the government is planning those high taxes. What are they thinking, that those of us who work for ourselves are rich! As always, the ‘Mayimba‘ (leaders) don’t have their feet on the ground,” he says aloud.
Noteworthy is the disgust of those who work on their own. In addition to the very high taxes, there is little legal protection, they have no supplies of raw materials from wholesalers and there are no bank loans.
“The State offers nothing to individuals and intends to collect their earnings as if they were feudal lords. They have moved from socialist paternalism over-exploitation of capitalists,” says René, who fills cigarette lighters in the La Vibora neighborhood.
The government of General Raúl Castro doesn’t have it easy. The economy is taking on water. And the measures to assist people are very unpopular. It is true that they are necessary. Any government that wants to get the country moving would have to apply shock therapy.
Fifty years of apathy, with an inefficient social system par excellence, the situation becomes more serious. Dimas Castellanos, dissident scholar, believes that the measures are necessary, but are poorly implemented.
“There is no reference point; the regime has no opposition with a reasonable alternative proposal. In the absence of political disagreements, the opposition is the government itself. When Fidel Castro abolished all vestiges of private work in 1968, he made a big mistake, now we are paying. He never should have closed the small businesses. When, in 1994, he authorized self-employment, he did so faced with the difficult social situation and not because the government saw fit to welcome private initiative. Now the same thing happens. My opinion is that it won’t work,” he predicts.
Castellanos thinks that if you want the particular sector to flourish, the first rule is to keep taxes low. “I do not see how the government will sell raw materials and supplies to the self-employed. Where will the money come from to provide bank loans. Ideally, they would make radical changes, recognizing that the current model has failed. But it is asking too much. From my perspective it is betting on an outdated version of savage capitalism,” says the opponent.
Not only the dissent sector is pessimistic. The ordinary people will not see much sense in getting a license and having to pay between 25% and 40% of their income in taxes. In the Carlos III shopping center, Herman, retired, is trying to make a living as a parking attendant.
On a good day takes home 30 convertibles pesos. But that is not every day. “I agree with paying taxes. But they should not exceed 10% of the profits. The current taxes are arbitrary and will force people to break the law” he says while reading an article in the Granma newspaper on the subject.
In Havana, many feel distrust toward government. After self-employment was approved in 1994, with the result that many people raised their standard of living, they began implementing a series of regulations and excessive control by state inspectors.
At its peak, 200,000 people were working for themselves. At present, it’s no more than 40,000. Hounded by the taxes that began to rise gradually and various prohibitions, licenses began to be returned.
Now, with the taxes through the roof and some leaders fearing that people will make money, new game rules issued by the government are not appreciated by hardly anyone on the island.
With over one million unemployed workers around a year from now, and with few legal guarantees offered to the exercise of private activities, the solution of the problems will be a personal matter. People will have to continue living through “invention” (theft) and illegalities. As always.
The feeling palpable in the streets of Havana is that the measures are too little too late, and too harsh. It’s like losing a game and in overtime.
Text and photo: Iván García
October 15, 2010