CUBA: Taxing Artists is a Tough Game

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Jul 29 1996 (IPS) - A large part of the dollar contributions to the budget, due from taxes on Cuban artists have been held up somewhere between the collection body and the State coffers.

The causes appear to be more than simply a lack of control, and something more to do with the shortfalls of the collection system which was implemented as part of the tax reform started on the island last year.

A report in the Trabajadores weekly, of the Cuban Workers Centre (CTC), states that more than 3,000 dollars in tax are “sleeping in the safe of one artisitic enterprise” of the capital alone.

This money was collected as discounts on the personal hard currency income of musicians holding contracts with the Cuban promoter Antonio Maria Romero from January to June this year.

The company executives claim they did not know “how to get this money into the State budget,” while banking representatives countered that “there was never any difficulty in carrying out this operation.”

“The worst of it is that this case is possibly not the only one in the artistic sector – though it is the one where most hard currency taxes have been charged to the people concerned,” said Francisco Rodriguez of the newspaper.

In January this year, the ministry of finances and prices approved a resolution declaring taxes on any personal income in hard currency.

According to Trabajadores, the difficulties faced by the companies retaining this income is mainly due to lack of guidance on how the norms and procedures were to be imposed.

It seems the absence of a tax culture does not only affect the contributors, but also the public servants who were suddenly given the job of collecting the money this year.

The National Office of Tax Administration (ONAT) reported that until the end of May hard currency tax income stood at 152,200 dollars, 85 percent of which was contributions from the 20,000 self employed workers.

Of the remaining 15 percent, 23,700 came from a group almost exclusively made up of artists, mainly musicians and painters.

However, in May a total of only 100 dollars were deposited, despite the fact that the highest concentration of these artists live here in the cultural centre of the island.

“This money is being discounted from the artists,” added Rodriguez, and the law says the payments must be made in the first 10 days of the month after the payment is received.

Sources in the ministry of culture said that in 1995, more than 8,000 Cuban artists were earning hard currency through contracts with institutions belonging to the ministry.

The bulk of the contributors are plastic artists and musicians who made more than 3,000 trips abroad last year to fulfil their artisitic contracts.

“The artists had an unfavourable reaction to the new tax,” said Humberto Comellas, economic sub-director of the Studios for Musical Recording and Edition (EGREM), an entity which represents most of the Cuban musical professionals.

The incomprehension is mostly associated to what is called the “double tax” whereby the artists to pay a percentage of their contracts to the state agencies which represent them, and at the same time, pay another tax on personal income.

This is naturally not too pleased with this.

“The taxes in Cuba are benign,” said Chucho Valdes, director of the Iraquere jazz orchestra.

Remberto Perez, head of the culture ministry department of finances and prices, said the tax regulations bore in mind the peculiarities of the artistic sector and predicted certain exemptions.

A request from the Union of Cuban Writers and Artists (UNEAC) asked for the Cafe Gijon prize, won by Cuban writer Leonardo Padura in Madrid, to be exempted this year.

The 10,000 dollars prizemoney will lose a cut to the Spanish treasury before it even reaches Cuban shores.

However, the cases of exemptions from “relevant activities” are not so common and the norm in artistic circles is for tax evasion by selling the work directly, bypassing the appropriate State body.

“There are still misunderstandings and reservations amongst the taxpayers and the collection organisms,” said Perez, but in the end, he added, the artists will have to understand their obligation is not to the cultural but the fiscal entities.