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Cuba to crack down on off-the-books pay by foreign firms
[December 07, 2007]

Cuba to crack down on off-the-books pay by foreign firms


(EFE News Service Via Thomson Dialog NewsEdge) Cuban authorities will introduce starting in January new regulations for employees working for foreign firms in the communist-ruled island to ensure that workers pay taxes on all compensation they receive.



Business sources told Efe that high-ranking officials in the Foreign Trade Ministry and the tax service met Wednesday with representatives of foreign companies to inform them of the planned changes.

According to Cuban regulations, employees who work for foreign firms have to be hired through a state company that collects their wages from the companies and in turn pays the workers.


Workers are paid their wages in Cuban pesos (1 peso = 4 cents), and it is usual for companies to pay their employees an additional sum in Cuban convertible pesos (1 peso = $1.08) that until now has not been within the framework of the law.

"The situation was well known to the authorities that companies were giving a little extra help to their employees, and the authorities wanted to find a solution for that situation," a businessman who preferred to remain anonymous told Efe.

Cuban authorities have shown in recent months their willingness to create a "new atmosphere" in the country that could favor an increase in foreign investment.

On July 26, during his address marking the most important holiday of the Cuban Revolution, acting President Raul Castro stressed the need to increase production and reduce imports, while expressing the country's readiness to open new opportunities for foreign investment.

Fidel Castro, now 81, delegated power to his younger brother in July 2006 after undergoing emergency surgery to stop intestinal bleeding. In the months prior to his illness, the Cuban leader pursued a campaign against corruption and "irregularities."

Copyright 2007 EFE News Services (U.S.) Inc., Source: The Financial Times Limited

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