During the December meeting of Cuba's National Assembly of People's Power, several days were devoted to detailed discussion of the Draft Economic and Social Policy Guidelines. Marino Murillo, Minister for Economy and Planning, responded to several questions related to the proposals in the Guidelines to establish non-agricultural, including urban, cooperatives.
It is proposed that cooperatives be privileged over small private businesses and the self-employed in the new tax system that is being established. Cooperatives will be exempt from the payroll tax to be levied on small private businesses and, as Murillo explains here, cooperatives would pay less tax on earnings. In this way, Cuba's socialist state — while accepting the need for small private businesses, many of which have been operating untaxed and unregulated for years on the black market — would promote cooperatives.
Economy and Planning minister on economic reforms
Selected comments by Marino Murillo, Minister for Economy and Planning, during December 17, 2010 National Assembly plenary discussion of the Draft Economic and Social Policy Guidelines.
Translation: Marce Cameron
It is proposed that a Guideline be added that says, "Great social inequalities will not be permitted to arise", or "put it in there as part of a Guideline". OK, we'll take a look at it and we'll study it. But I say that to not have great social inequalities, the most important thing is to not have concentration of [productive] property [ownership]. The concentration of property creates inequalities, this is automatic.
Worker participation in decision-making
Many have proposed, "Strengthen the role of the work collective in decision-making". We'll have to see to this when we establish how the socialist state enterprise is going to function, the role of the work collectives, the fulfilment of the plan and so forth.
Scope of urban cooperatives
In the case of non-agricultural cooperatives, they're going to be established .... In how many activities? In all those that need them, and to the extent they're approved. Evidently gastronomy and services will have first priority in this process ... You can take a local barber salon and lease it to a barber, but barber salons with eight seats are another thing. Is a barber salon going to be leased to eight people at the same time? This is a little more difficult, of course, so it will have to be worked out; however, it could be that there you create a cooperative form of management.
The same could happen in an artistic workshop, the same could happen a lot in local industry other than the food industry. How many small carpentry workshops do the local People's Power [municipal government] enterprises have, with three or four machine tools, four of five workers; this can be organised. So [cooperatives] may start appearing in these sectors to the extent that we'll be studying them and establishing them.
Cooperatives and taxes
A self-employed worker is not going to have the same taxation rate as a cooperative in the non-state sector. The tax rate of a cooperative in the non-state sector is going to be much less than that of a self-employed worker, because cooperative property is more social than the individual self-employed worker ... Economically, as this is a cooperative and is social property, we can impose a tax regime that is less burdensome than the other, and this is what we're planning for the cooperatives that are going to be established outside the agricultural sector [including urban cooperatives].
And for the agricultural sector as a whole we are drawing up a tax regime that is less than that for the non-agricultural cooperatives. So the tax scale will be: self-employed worker, urban cooperative, agricultural sector. That is to say, the agricultural sector is going to be privileged in terms of tax rates, firstly because the costs are higher, secondly because what we need most of all is to boost [food] production ...
What is a cooperative whose members are other cooperatives?
In the first-order cooperatives the members are natural or juridical persons [i.e. people or entities], in second-order cooperatives they are solely juridical persons. So, there is a concern that if two cooperatives unite, this contradicts the Guideline that says that there won't be concentration of property [ownership]. These are two cooperatives that join together and contribute their capital to create a third [cooperative] that is second-order to provide a service. Imagine two agricultural cooperatives that come together to create a sales outlet where they're going to sell flowers and agricultural products. This involves six people, this is not all of the people there, the tasks are divided.
There could be two agricultural cooperatives that join together and set up an equipment workshop, say, for tractors or combine harvesters, to provide productive services to their own or other cooperatives. And we need to do this, because one of the things the agricultural sector is asking for is the efficient provision of services needed by agriculture. We have to accommodate this.