Cuba reauthorizes private sector, but with tighter controls

Asley Alfonso Gil works at his private bicycle repairing business in Cienfuegos province, Cuba

Cuba on Tuesday reauthorized private businesses after a year-long freeze, but with tighter controls than before on a segment of the economy that now makes up 13 percent of the island's workforce.

The official daily Granma said the stricter measures were necessary because of numerous breaches by private entrepreneurs, such as tax evasion, under-declaring the number of people they employed and failure to pay employer contributions.

The government suspended the issuing of business licenses in August 2017 for around 30 of the island's most profitable business activities, in particular the restaurant trade, in order to review regulations.

"We are not going to go backwards, nor slow down, nor allow prejudice against the non-state sector, but it is essential that people respect the law, in order to consolidate the gains," said then-president Raul Castro, who was replaced in April by Miguel Diaz-Canel.

As a result of the new restrictions, the number of trade categories to be authorized will be reduced from 201 to 123.

"No activity has been eliminated but they have been regrouped," the deputy minister for labor, Marta Feito, was quoted as saying by Granma.

On the other hand, some new categories of private entrepreneur have been introduced, including "baker" and "renter of transportation."

The number of small private enterprises has boomed since 2008 in the wake of reforms launched by Raul Castro -- who succeeded his older brother Fidel -- in a bid to modernize the crumbling Soviet-era economy.

The private sector employed 591,456 by May this year, official figures showed, equivalent to 13 percent of the working population.

Asley Alfonso Gil works at his private bicycle repairing business in Cienfuegos province, Cuba, on March 22, 2018