The Revolution Will Be Taxed

Cuban & Latin American Ways of Taxing Private Enterprises

Abstract

Half a century after Fidel Castro’s Revolution, Cuba started opening its economy. This ongoing and gradual process began in the 1990s, with the ‘Special Period’ promoting the creation of the first private enterprises. In this context, Cuba had to implement an economic policy not traditional to socialism: taxes. This paper argues that Cuba’s efforts to tax the newly created micro, small, and medium enterprises are positive. Drawing comparisons with other Latin American countries, data show that the Cuban way of taxing private enterprises is not significantly different from the Latin American one. Crucial political and economic peculiarities of Cuba need to be addressed for their impact on Havana’s taxation system, such as the United States embargo. The aim is to infer normalized research about Cuba, giving preference to tax issues like enforcement, consumption taxes, and revenue collection. In sum, Cuba’s taxation problems are parallel to the rest of Latin America.