As if the current legislation, including the list with 124 prohibited activities, the Government seems determined to stop this process even going against its own laws. That is, among other things, what Oniel Díaz Castellanos, founder of the boom consultancy.
This same Monday, the National Assembly of People’s Power approved the State budget law for the year 2023 and, as part of it, removed the tax exemption for micro, small or medium-sized companies (MSMEs) during their first year of life. As reported in the official press, “based on the need for all economic actors to contribute to generating income to finance social services and programs, the tax exemption for MSMEs is without effect, for a period of six months when they arise from a reconversion and one year when they are newly created, constituted as of 2023. MSMEs constituted previously and that are enjoying this benefit, keep it until the end of the period for which they were granted. was awarded.”
The measure, claims Díaz Castellanos in a direct stream from facebookis not only lethal for new entrepreneurs and to attract investment, but also goes against the gambling laws approved by the regime.
The announced measures, he asserts, “tremendously fracture that phrase of equal conditions between economic actors”
“There’s a decree-law of MSMEs, there is a list of prohibited activities, but there is no exchange market, there are no inputs, there are not enough credits, there is a rigid regulatory framework and, on top of that, now there is zero incentive, zero support, because the company has to pay taxes as if he had been working all his life”, argues the consultant.
Faced with this, he recalls, in the Special Development Zone of Mariel, foreign or national investors “have ten years free of taxes on profits, are exempt from the tax on the use of the labor force and have various incentives.” The announced measures, he asserts, “tremendously fracture that phrase of equal conditions between economic actors.”
The government bias against MSMEs, however, it is not something new. Díaz Castellanos himself has been warning for weeks about the setback that the process of creating private companies seems to be suffering. An example is that the State, which had been approving between 100 and 120 small companies weekly, has spent “two consecutive weeks without announcing new MSMEs, an unprecedented event in the last twelve months”.
“You cannot whistle and stick out your tongue at the same time. Either the private sector is accepted or it is not accepted. And the second no longer fits after guidelines, congresses and ten years,” wrote the founder of Auge this Sunday in their social networks. Given the avalanche of questions and comments, Díaz Castellanos promised details in a direct one, which he finally broadcast on Monday night.
In it, the entrepreneur recalled that there are more than 10,000 applications to be MSMEs and that more than 4,000 of them remain to be approved, “a not small number.” Several obstacles are being placed on these, Díaz Castellanos listed, among them, forcing them to withdraw the commercialization of their main activities and put them as secondary activities, or questioning those companies that consign a broad corporate purpose (something common in societies where the free market, which allows companies not to stick to a single purpose, but to many possible ones, thus making their activities more flexible and reducing the risk of investment). All of this, Díaz Castellanos reiterates, does not appear in the decree-law of MSMEs or in the list of prohibited activities, which is the current regulatory framework.
None of this, he also says, “affects the country’s system, violates the Constitution of the Republic, causes economic, social or political damage to our country.”
None of this, he says, furthermore, “affects the country’s system, violates the Constitution of the Republic, causes economic, social or political harm to our country.”
The change in the starting conditions, “the only thing they do is compromise the credibility of the country’s economic policy and the credibility of the institutions that apply it,” says the businessman, for whom “without stability, without confidence in regulations, in the way that they are applied, in the institutions, the country will not advance”. A “powerful business fabric,” says the entrepreneur, is, among other things, what Cuba needs to get out of the great crisis in which it finds itself.
Díaz Castellanos defends himself against the criticism received from the ruling party, which argues that his are “union demands”, and explains that those who are harmed by these “hesitations” are “everyone”. “For those who think that they are confronting Monsanto, Tesla or Amazon, the great monopolies of global capitalism, I must say no, that they are simply criticizing, pointing to small companies that have few workers, that have few resources, companies small businesses that are currently extremely limited by the current context,” said the consultant, who pointed out that the ventures “were already born with control” such as restricting one MSME per capita and having a limit of 100 workers.
In the same way, he declares, “there is no going back on the role of the private sector”, which, he details based on data from the National Assembly itself, represents 34% of the labor force and between 12 and 14% of GDP. In his conclusion, he cautiously opines that “it was a mistake” what was built in Cuba in the last sixty years “with its back to the market.”
________________________
Collaborate with our work:
The team of 14ymedio He is committed to doing serious journalism that reflects the reality of deep Cuba. Thank you for accompanying us on this long road. We invite you to continue supporting us, but this time becoming a member of our newspaper. Together we can continue transforming journalism in Cuba.
