Margarita Alarcón Perea
It’s been a topic of conversation on the streets, in places of work, in the news (foreign press) and the blogger sphere. Cuba will be imposing a new import tax come this September. The information came out in the form of a document (PDF) posted on the web site of the National Customs Agency.
Entrepreneurs have been popping up all over the country after the very extensive layout in the national newspaper announcing which jobs qualified as legal entrepreneur endeavors. From watch repair shops to restaurants to cafeterias and impromptu clothing stores. All of these immediately began to lighten the burden of shopping and receiving services in a country which has been lacking in retail business for way too long. Now you may walk up a couple of blocks from any neighborhood in Vedado and either get the batteries in your watch replaced or have your cell phone fixed or buy yourself a new shirt, dress or pair of shoes. On occasion at much more moderate prices than those offered in the state owned businesses. You may also sit down for a sandwich or have a complete meal at any of the eateries sprouting up all over town. It’s all quite comforting and relaxing as far as a society goes; what is more important, it is all quite welcome and overdue.
How they work
When these new job opportunities opened up, the State took the needs and the availability of job options into account. For this purpose the page in the paper that listed all of the possible business options one would have hoped would have been as explicit as possible. In some instances this was not the case. Cuba has a serious issue when wording legal jargon and the reader has an even bigger problem when this legal jargon is left to interpretation. For instance, one of the new job opportunities was listed as “sale of CD’s ,LP’s, DVD’s”. Nowhere was it stated that the sale of these items was to be that of “used” ones and not items created by individuals with either internet access (downloading) or the ability to burn 30 CD’s or DVD’s from an original and which include the works by Cuban artists who are signed to Cuban record labels and will hence not see a cent from royalties on these sales. Same applies to movies, you can buy for less than 5cuc’s the entire bootlegged Elpidio Valdes collection a comic strip created by Juan Padrón, Cuban film maker distributed by ICAIC the Cuban National Film Institute. This entire situation has been going on for over two years now and I for one have seen no sign of it coming even close to an end. Having worked in the music industry for a good long part of my life and having musicians both as friends and as family members I found this legalized pirating remarkably insulting.
The food entrepreneur business also has its loopholes. Most businesses will buy their produce from the farmers markets and fishermen and then some from the general state owned stores. Now, the reality is simple, those who have family abroad will be at an advantage since these can help out with the wholesale acquisitions of a good lump of the stuffs necessary in order to start a business and keep it going. In some cases this was happening in a constant free flowing manner which not only helped to sustain the business itself but also garnished the services and quality of the goods with fresh new ideas and incentives not seen on the island in a long time. Things like matching heavy duty salt and pepper shakers, hot sauce and other goodies from – I’m guessing here, COSTCO, Wall-Mart etc – were coming down in the huge black plastic duffle bags brought down from Miami, Venezuela and Ecuador among other nations.
Not all was centered on the plight of buying from aboard. At one such Paladar I noticed these very simple presentation plates and asked if these were also being brought down from somewhere (over the Rainbow…), “Oh, no!” said the owner. “I commissioned them from a guy who hand draws the logo for me and I acquired the plates here at a state owned store.” With this response I thought: how grand a situation where not only was the owner making a buck but he was also helping to entice other members of society to join the independent work force. The other positive edge to this whole opening up of events has been that if you own a business in Cuba and you employ others, you pay less tax to the state. An even bigger plus is that many of these restauranteurs will use their wall space as impromptu show /sales rooms for the works of young artists. Job opportunities galore!
So, where’s the problem?
If you’ve read this far then you must have started to wonder about the first paragraph in this piece and the rest of my train of thought, right? Well read above again, where I use the word “plight” in regards to bringing down goods. Cuba established the legal possibility of opening up certain levels of business but it didn’t have a system of whole sale in place for those business in order to enable the owner/investor to acquire the stuffs to supply their places of work. So what happened? Mules happened. And more importantly, a huge traffic of un controlled import which was completely under the national radar. It also has served as the perfect food for corruption inside the Customs Agency. You pay me a buck or two, I let you by with 56 pounds worth of parmesan cheese and Hunts tomato paste or 72 multi colored jeans in 7 different sizes and two duffle bags full of bright and shiny in style t-shirts in sizes S, M, L and XL.
The other thing that sprouted up precisely because of the misinterpretation of the wording in the law was not only the birth of pirating which in my opinion has no place in this country, but too a situation whereby an individual who acquires a license to sell clothing , understood to be clothing manufactured by a seamstress, ideally the one who has requested the license, would then open an impromptu shop on a street corner or home to sell clothing and accessories imported from abroad.
Not all the traffic from Miami and elsewhere is about this. But much of it is, and its wrong and illegal anywhere in the world. You import for a business, you pay a business import tax. It’s as simple as that. The problem now stands in the legal writing of the new customs regulation. Is the population of the island all involved in some sort of entrepreneurial business? Nope. Does some of the population depend on what their family members send them, whether it be in the form of food or clothing or anything else? Yes. Is it fair to regulate affecting all such that many will be footing the bill of the few? I think not.
Putting things into perspective, the problem the way I see it, isn’t the regulation on a personal import tax. The problem lays in not having worded the text properly clarifying that until Cuba has the ability to establish a wholesale market, something which is unlikely while Helms Burton and their law continue running the economic show on this island, there should be a an import tax on large (obvious) quantities of merchandise into the country. You can establish a clothing shop on your front porch, or desire to have delicacies on your menu , you’re just going to have to pay for the import of what you sell.