Q&A: Will New Taxes & Restrictions Stifle Cuban Businesses?

This week, as Cuba implements new laws and regulations that impose new taxes, restrictions and requirements on the private sector, CIP senior non-resident fellow María José Espinosa Carillo offers her analysis of their implications on businesses in Cuba and for the country’s economy. In a Q&A with Latin America Advisor (a daily publication of The Dialogue), she explains:

“The stated aim of the new regulations is increased order over the private sector in Cuba, but they risk undermining private-sector growth—a necessary component of the country’s economic future. The mixed nature of the reforms—some offering protection for workers while others curtail entrepreneurial freedom—signals the Cuban government’s ongoing reluctance to fully embrace private enterprise as a driver of the country’s growth. Shifting regulations create uncertainty and distrust among entrepreneurs and potential investors, hindering investment and economic progress. The Cuban people are suffering an unprecedented multidimensional crisis. Over a million people have migrated since 2022, creating a massive brain drain–the effects of which we will see for decades to come.

Meanwhile, civil society organizations, entrepreneurs and community leaders are at the forefront of promoting community initiatives that generate employment and create social benefits such as social services for elderly and vulnerable populations. With an entrepreneurial solidarity spirit, they are building partnerships among themselves, as well as with state institutions, when possible.

We hope to see a more coherent regulatory framework that balances inequality stopgaps with the need for non-state sector growth and innovation. Increasing transparency, reducing barriers and fostering partnerships between state and non-state actors would help build confidence and stimulate investment, which the country so desperately needs. Further, the state must recognize the non-state sector and other civil society groups as legitimate actors. The government should send a clear message of support and encouragement to young entrepreneurs, who are currently looking anywhere but the island to build their futures. Lobbing confusing laws and repeatedly shifting regulations is no way to empower them.”

Read the original article here.