Oniel Díaz

Oniel Díaz

Regulations for private import and export in the balance

In the midst of an unprecedented situation for the world and for Cuba, the island’s authorities decided to try to resolve one of the most repeated demands of the private sector. For years there was a demand for agile, safe and legal mechanisms to import or export, as well as a wholesale market. Based on an enormous need to expand the sources of income in freely convertible currency and also to advance more quickly in the economic transformations pending implementation since the last two congresses of the Communist Party of Cuba (PCC), four legal norms were issued, grouped in the Gaceta Oficial Nº 59 of this year. These regulations, with the forced intermediation of almost 40 state enterprises, create a new scenario for the economy’s private actors to participate in the country’s foreign trade. https://oncubanews.com/cuba/gobierno-cubano-da-luz-verde-a-las-exportaciones-importaciones-y-al-mercado-mayorista-para-el-sector-privado/ Like almost everything in life, what was announced combines a group of positive and negative elements. Personally, I don’t usually expect idyllic solutions when it comes to facing problems. I prefer to walk with my thoughts on the ground and my feet in the sky, to take advantage of the opportunities that come by, even if they are incomplete or perfectible, at the same time...

Photo: Kaloian Santos

Has the time come for professionals in the private sector?

Certain signs suggest that airs of change are blowing in Cuba. COVID-19 has come to mobilize wills that seemed inert in the face of the risks of making difficult decisions and the mentalities clinging to the illusion of expecting different economic results doing the same thing that has been done for decades and that life, stronger than any whim, has proven ineffective. The economic strategy announced days ago by the Cuban government seems to be going in the right direction, but it’s still a great unknown because the details of its implementation have not yet been converted into new rules of the game, nor disclosed so that we can join the final structure of the regulations to come with our opinions. The practical and apparently minor details, those that are little talked about in television appearances, or that some are not interested in knowing because reading a Gaceta Oficial is not very entertaining, are usually the decisive ones. They say more than an official statement or a high-ranking public servant’s statement. It is there and in the interpretation of the regulators where the game is won or lost, where we will know, when they are published, if we are really...

Photo: Otmaro Rodríguez.

Coronavirus: Reasons to activate tax exemption in the Cuban private sector

In recent days I have spoken with several clients and colleagues who are beginning to feel the impact of the coronavirus on their businesses. Especially, international tourism-related ventures like landlords, certain restaurants and Airbnb experiences have received cancellations from individual travelers and groups until the month of May. Other types of businesses indirectly linked to the arrival of travelers, such as the ventures that provide them with services or provide them, have started being affected. Likewise, those entrepreneurs who have just concluded investment processes or who are in the middle of said phase will be damaged, perhaps to a greater degree. Unable to generate income, they will have to face the absence thereof, which will harm not only the owners but also the employees and their families. In most cases, I have perceived a great deal of responsibility with actions aimed at preserving, in the first place, the health of customers and employees. There are many businesses that at this point have decided to close or apply to management models that do not involve person-to-person interaction. It must be remembered that all this occurs in a context in which the private sector along with the entire country has been suffering...

Photo: Otmaro Rodríguez.

20 recommendations to unblock the private sector in Cuba

Responding to the statements made by the President of the Republic, here are 20 recommendations to unblock everything that hinders the performance of the private sector in Cuba. 1 To create a commission made up by the government, academics and self-employed workers to review the current regulations published in the Official Gazette No. 85 of November 6, 2019. To identify still existing problems regarding the sector’s contribution to the national economy and prepare a proposal of measures to solve them. 2 To draw up, with the participation of the self-employed, cooperative members, state businesspeople, academics, jurists and civil servants, the legal norms that will recognize small and medium enterprises (SMEs) and will define their duties and rights in the national economy. 3 To resume the constitution of non-agricultural cooperatives (CNA), especially in activities that may be proposed by citizens and not only in those that are of interest to the authorities. To review the approved regulations to perfect the CNA management system published in the Official Gazette No. 63 of 2019. 4 To eliminate the list of authorized self-employment activities and establish a list of banned activities. 5 To authorize the individual provision of professional services as self-employed and grouped...

Photo: Kaloian

I like to pay taxes

“Nobody likes to pay taxes.” That was the reply that a public official used to refute what I told him, during a discussion we were having, about tax evasion and underreporting among private workers and that these were largely due to the deficiencies of the current regulatory framework. I tried to explain, without success, that greed and disrespect for legality were not the only explanations for the fiscal indiscipline that abounds today in the private sector. The tax system applied to private work would seem to not have as the main purpose to collect financial resources to later redistribute them, but to limit the growth and development of the private sector in Cuba. Why? Because the current tax regulation has two congenital defects, totally unnatural for the business world and that only leave two options: to keep you as a small business or to grow at the expense of starting to violate what is established and having a bad ending. As some friends, half sarcastically and half seriously, told an entrepreneur colleague who was celebrating with them the expansion of his successful restaurant. “Congratulations, your end is near.” The first defect is that the level of expenses that can be...

Photo: Roberto Ruiz.

Elimination of 5-year visas: a mini-blockade for Cuban private sector

The U.S. Department of State has achieved that Cuban private and state enterprises have something else in common: both are denied access to the U.S. market. With the disappearance of B2 visas valid for 5 years and with multiple entries, a political decision with administrative pretense, a "mini blockade" for the Cuban private sector has been added to the scene of the confrontation. The disastrous effects accumulate over the slowdown in the travel of Americans to Cuba due to the change of policy towards the island by the Trump administration in 2017, Hurricane Irma and the "induced coma" suffered by the U.S. embassy and consulate in Havana. https://oncubanews.com/cuba-ee-uu/eeuu-mantendra-embajada-en-cuba-con-personal-minimo/ This new measure affects entrepreneurs twice over. Like tens of thousands of other Cubans, it hurts us as individuals, by considerably reducing the possibility of visiting our relatives without it being necessary to live the terrible ordeal of going to a third country to obtain a visa to travel. And it affects us as entrepreneurs, when all of a sudden it becomes practically prohibitive to obtain resources in that country, as many have been doing in recent years. All this is combined with the domestic impossibility we have of making imports with...

Tourists in vintage American convertibles in Havana. Photo: Desmond Boylan / AP.

New regulations for private sector: more no’s than yes’s

A few days before the year of hibernation of self-employment in Cuba was up, the new regulatory framework finally saw the light. The very name with which this reorganization was baptized, “improvement process,” gave the idea that, when that day came, we would all celebrate the appearance of a group of solutions that would put just order in the life of private businesses. However, the bottle for the celebration again will not be opened. It’s not that there aren’t positive aspects in the new regulations. They do exist. Having to use contracts for the use of the workforce, the increase in the limits for authorized expenses to deduct for the payment of taxes on personal incomes and the penalization of discriminatory attitudes due to skin color, gender and sexual orientation are good examples. The experiment of transportation in Havana also has potentials, as long as it is possible to attract private taxi drivers and transport workers. A taxi with private permit makes a sign with the hand on its route in Havana, on March 10, 2018. Photo: Desmond Boylan / AP.   But the first thing that stands out after studying the legal regulations is that...

Malecón de La Habana, Cuba. Photo: Desmond Boylan / AP.

It’s not with Marco Rubio, it’s with the Cuban government

In recent months it has become increasingly more frequent to read news about lobby actions in the United States by some Cuban businesspeople. These have been carried out with the support of certain U.S. pressure groups that are opposed to the blockade and the measures taken during 2017 in relation to Cuba by the Trump administration. Thus we have known about letters to President Trump requesting that his predecessor’s decisions not be rolled back, about meetings with Congresspeople in Washington and about interviews with diverse U.S. media. A few days ago OnCuba reported on a new initiative of this type, on this occasion addressed to Senator Marco Rubio. A group of Cuban private businesswomen, according to one of its members, invited “him or part of his team to come and learn about Cuba, the Cubans or about our businesses.” This new attempt to “influence” has inspired me to bring to public debate an aspect that counters the proposals of the businesswomen. Before continuing, I want to make two “healthy” clarifications: 1- My intention in this text is not to label of that or the other the colleagues that have become part of the initiative, among which I know several. For...

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