The rules of the game for the non-state sector are changing 

An environment of order and legality will always benefit both citizens and foreign visitors. Photo: Jose M. Correa

Cuba's hectic economic life is currently marked by the introduction of new legal norms aimed at promoting an orderly environment in the management of the businesses of small entrepreneurs and self-employed workers in the country's non-state sector. One of the most significant aspects, which stands out for its transcendence in terms of rights and duties of these workers, was the creation of the National Institute of Non-State Economic Actors, a national body under the Council of Ministers, which will bring together the attention of these economic actors in a single State institution.The set of legal norms, published in the Official Gazette, are a reflection of the work that has been carried out for several months in the modification of those published in August 2021, explained to the press Johana Odriozola Guitart, vice minister of Economy and Planning.Those that are modified do not constitute all the regulatory provisions that non-state economic actors must comply with, since there is a group of rules that must be followed by any actor in the economy.In this case, only those that essentially regulate the creation and operation of these actors and some complementary elements, such as the tax, accounting and social security regimes, are included.At the same time, new aspects are included, such as corporate social responsibility, and others are generalized, such as competitive bidding.One of the fundamental issues in the modifications is that any contract by state entities that involves a state-owned good or asset and that transfers certain rights for its management to non-state actors must be put out to tender.Another issue is the decentralization of the license allocation for mipymes and non-agricultural cooperatives (CNA) to the national level, an issue that is consistent with the municipal autonomy that has been worked on.In addition, the self-employed workers (TCP) and the agricultural and livestock cooperatives will be included in the approvals already made.More technical modifications included in the legislation are those related to the social objects and the new parameters for their approval, so that the main activity of these actors is the one that is carried out most frequently, and that the secondary ones are in function or have a fundamental affinity with it.MAIN MODIFICATIONS TO THE REGULATIONS ON THE EXERCISE OF SELF-EMPLOYMENTAn environment of order and legality will always benefit both citizens and foreign visitors to the country. This is clear to those who promote the new measures.Carmen Rosa López Rodríguez, director of Non-State Employment at the Ministry of Labor and Social Security, explained that the main modifications made to the self-employment regulations were based on the criteria of the agencies and local governments, as well as the analysis of complaints and suggestions from the population.All this made it possible to identify the aspects that needed to be modified. Within the framework of this approach, duties and rights have been introduced, in accordance with the policy approved for the updating of the Labor Code, and the treatment of labor, social security and criminal matters has been standardized for all actors in the non-state sector.With regard to the exercise of self-employment, the number of employees, including family members, is maintained at up to three; family assistance is permitted on an occasional, non-habitual, frequent or continuous basis by the spouse or family member up to the second degree of consanguinity or affinity; and employees are subject to the provisions of the General Social Security Regime.It also specifies the obligations of the TCP with respect to the persons he hires, introduces the novelty that the authorization to practice can be requested at any Government Procedures Office, defines that the secondary activities must have a fundamental affinity with the main activity and adds new mandatory requirements to be complied with in order to practice. Maritza Cruz García, first deputy minister of Finance and Prices, pointed out that within the modifications, the advantage for the partners of the mipymes, exempt from the payment of personal income tax on the dividends they receive in their first year of operation, will be eliminated.In the case of TCP, she added, the exemption from payment of tax obligations enjoyed by those who became self-employed in the month of their registration in the taxpayers' registry and the following three months will be eliminated.Cruz García emphasized that as part of the updating of the tax system, the accounting of the TCP will be simplified, and those who obtain an annual income of less than 500,000 pesos will only be required to keep the Income and Expense Control Register and the documentation evidencing the operations, as established by Cuban financial regulations, all this to make the operations transparent and legalized.These modifications will contribute to the reduction of the fiscal deficit, an increase in tax collection through the elimination of tax benefits that have fulfilled their purpose and promoted the development of non-governmental actors; the strengthening of the tax authority based on the improvement of tax control and management mechanisms and the reduction of legislative dispersion.