Cuba to levy new income tax on public employees

JOHANNESBURG, Dec. 10, 2013 (Xinhua) -- Cuban leader Raul Castro addresses the state memorial service for Nelson Mandela at the FNB Stadium in Johannesburg, south Africa, Dec. 10, 2013

Sept. 6, 2016

HAVANA, Sept. 2 (Xinhua) -- Cuba said it has revised its tax and social security model, with around 1.5 million public employees now having to pay new contributions to the state, according to local media report on Friday.

According to Friday's Cuban daily Granma, public workers making over 500 pesos (about 20 U.S. dollars) a month, will face a new 5 percent social security tax, named the Special Contribution to Social Security (CESS).

Workers making over 2,500 pesos (100 U.S. dollars) a month will pay the CESS and an income tax of between 3-5 percent, known as the Tax on Personal Income (IsIP).

Meisi Bolanos, the deputy finance minister, explained that the taxes would be taken directly from employees' paychecks, starting in September, said the report.

Guillermo Sarmiento, director of the labor and salaries department of the Ministry of Labor and Social Security, added that the CESS would help extend Cuba's social security net, which covers almost 1.7 million pensioners.

After taxes were scrapped following the 1959 revolution, Cuba has recently begun a progressive tax reform, as part of the economic reforms proposed by President Raul Castro.