Payments to social security and income tax deductions begin next month for many Cubans. Photo: Cuba Business Report staff.
Approximately 1.5 million Cuban workers will be required to pay income tax next month. This will be the first time that most Cubans will pay taxes since 1959. It will take effect starting in October this year. Those working for government companies and industry workers will have to contribute 5 percent in social security taxes on earnings above 500 pesos or around $20. Those earning more than 2,500 pesos or $100 per month will pay income tax between 3 to 5 percent according to the Cuban State Media. Granma, the Communist Party daily reported that Meisi Bolanos Weis, the Deputy Finance Minister, had stated that these deductions would be automatically taken off workers salaries by employers. Taxes have been abolished in Cuba since Fidel Castro’s 1959 revolution. Wages for state workers is generally low. However, the government subsidizes food, utilities, social security, transportation, health, education, culture and sports. The average monthly wage of workers in Cuba last year was 687 pesos (CUCs), or $25 as per the official exchange rate. This figure is the average wage of 5 million workers in the labor force, 80 percent of whom work for the state. Some workers have been paying social security and…
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