Cubans Line Up to Pay Taxes for First Time in Over 50 Years

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Cuban citizens are lining up at their local tax offices for help in filing tax forms for the first time since the 1959 revolution — a milestone closely watched by a group of U.S. politicians who are in the island this week to gauge the country's economic changes.

The government introduced on Jan. 1 the nation's first new comprehensive tax code, the latest in a series of market-oriented reforms initiated by President Raúl Castro. This means most Cubans will now have to pay taxes for the first time in their lives. Many aren't happy with the idea, though others grudgingly accept the need — provided it is put to good use.

It has two dimensions, it's a two-way street. First, tax is a form of citizen participation, our contributions help in the construction and support of our society. It also gives the state a responsibility to show what is happening to those funds and give answers to inquiries from the population.
— Vladimir Regueiro, Director of Taxes with the Cuban Ministry of Finance

"Well, I think that if the tax is going to be good for the people, it's great. I think that is correct. For example, if they are going to repair the streets, repair everything that we need to continue working, let's see," said Maria Teresa Olivera, an English teacher in Havana.

Meanwhile, a delegation of American lawmakers led by Sen. Patrick Leahy (D-Vt) is in Cuba to to get a firsthand look at economic changes on the island instituted by Castro in recent years, including the legalization of limited private enterprise, the creation of a real estate market and the elimination of travel restrictions for most islanders..

The group is also said to be stressing the importance of freeing a jailed American, Alan Gross, whose detention has chilled relations between the two countries. Gross was jailed in 2009 for illegally distributing communications equipment on the island while on a U.S.-funded democracy-building program.

The trip is the first to the Communist-run island by high-level U.S. politicians –five U.S. senators and two representatives– since President Barack Obama's re-election in November. The group arrived Monday and is scheduled to depart early Wednesday.

Rep. Jim McGovern, a Massachusetts Democrat, said the lawmakers would "like to see relations improve," adding that he hoped to see the day when all U.S. citizens could travel to Cuba freely. Washington bars American tourism to the island, though the number of U.S. citizens traveling to Cuba on licensed cultural, religious or educational exchanges has soared under new guidelines enacted by the Obama administration.

As Cuba moves towards a mixed economy, income differentials are growing.

There are small businesses in the towns along with more private farmers in the countryside and even state workers can get productivity related bonuses. Now the government wants its share to help modernize the country and finance the economic reforms.

The authorities, though, are also likely to face greater pressure from the tax-paying public for more transparency about how it is spent.

"It has two dimensions, it's a two-way street. First tax is a form of citizen participation, our contributions help in the construction and support of our society. It also gives the state a responsibility to show what is happening to those funds and give answers to inquiries from the population," said Vladimir Regueiro, director of taxes with the Cuban Ministry of Finance.

The new code covers everything from income, sales and property to inheritance tax.

Rates range from 15 and 50 percent, though many of the new self-employed will be given tax breaks until their businesses are established.

Reporting by The Associated Press.