Havana, Monday 23 de October de 2017 09:42 am

Cuba Expands Income Tax and Social Security Contribution for all State-owned Company Workers

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Cuba Expands Income Tax and Social Security Contribution for all State-owned Company WorkersHAVANA, Cuba, Sep 2 (acn) Cuba will expand to all state company workers an income tax and contribution to social security, which has thus far been contributed by workers in a limited economic sector.
The measure ratifies the role of the tax system in redistributing income and allows lowering the use of the state budget to fund public expenses.
In a news conference on Tuesday at the Ministry of Finances and Prices, deputy minister Meisi Bolaños said that workers in the budgeted sector have been making their special contribution to social security following salary increases since 2008, specifically in the areas of Education, Public Health, the Legal System. This contribution, she said, has been in tune with regulations established by the Ministry of Finances and Prices and according to salary scales.
This social security contribution has also been made by workers linked to state-companies in improvement processes, the national waters fishing fleet and those in the foreign investment area, including the Mariel Special Development Zone.
Now this social security contribution will be made by all those workers receiving salaries over 500 Cuban pesos as long as such income includes additional payment, distribution of gains as a bonus for high efficiency and extra payment for high performance. The contribution will be 5 percent of all payment received.
Meanwhile, the income tax will be applied on monthly payments over 2 500 pesos when such income includes some of the aforementioned elements. Those workers receiving between 2 500 and 5 000 pesos will pay 3 percent tax and those receiving over 5 000 will contribute 5 percent.
The director of Labor Organization and Salaries at the Ministry, Guillermo Sarmiento stressed the impact by the new regulations in increasing the budget aimed at social security, which has growned to over 5.6 billion pesos in 2016 to give protection to over 1.6 billion pensions.
Sarmiento also noted that since 2013 up to date, the average salary at the Cuban state company sector has increased by 54 percent reaching 779 pesos at present. He also said that around 1 300 companies are currently paying salaries over 500 pesos as an average, while 405 enterprises pay salaries over 1 000 pesos, and only 25 companies are paying salaries higher than 2 500 pesos, which are hiring some 14 000 workers.

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