Cuban Parliamentarians Discuss Economic Guidelines and Fiscal Policy

Prior to the analysis, the Minister of Economy and Planning, Marino Murillo, gave details of the new tax system that is scheduled to be implemented in the Island as part of an ongoing process to update the Cuban economic model.

He explained that the different tax categories were set taking into account the Cuban social reality and the justice that should prevail. “Cuban self-employed workers are very different from those of other countries because here they enjoy free health care and education as well as other benefits that are not available in other parts of the world,” he said and added that their contribution to social security, included in the taxes, is “completely fair and inexcusable.”

As to prices, Murillo advocate the State’s non interference with commercial relations between people who provide services or sell a material good and those who pay because, he noted, it would be impossible to regulate it.

Later on, he referred to the tensions and costs that result from maintaining the so-called ration card, effective since 1962, to sell rice, sugar, chicken, fish, eggs, coffee, cooking oil, pasta and bread among other staples (when they are available) at subsidized prices.

He pointed out that this method has become irrational not only because of the subsidized prices but also because of the distribution mechanism. However, he said that the ration card should not be eliminated all of a sudden but in an orderly manner.

Introducing the Draft Guidelines for the Economic and Social Policy of the Party and the Revolution, Murillo explained that, for its elaboration, a thorough analysis of the national economy and of internal and external adverse factors were taken into account.

Among these factors he mentioned the huge economic losses suffered since 1997 due to the increase of prices in the international market ($10.9 billion) and because of the devastation caused by 16 hurricanes ($20 billion).

He also mentioned low work productivity and the low contribution —4.4%— of agriculture to the Gross Domestic Product (GDP) although 18% of the national labor force works in this sector.

Other factors the Minister of Economy and Planning mentioned included poor fiscal discipline on investment processes, inadequacies, lack of enough capital to develop the productive sector, poor infrastructure, and aging of the population.

In reference to the current level of salaries, Murillo noted that increasing productivity is the only way to raise them.