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Cuba Explains New Tax System

Cuba has issued details of the nation's redesigned tax policy as part of its plan to move hundreds of thousands of state workers into the private sector.

The state-run Granma newspaper on Friday explains the basics of the Cuban tax system and new tax rules for self-employed and those who create jobs and hire others.

It says that those selling goods and services will pay a monthly 10 percent income tax and will put another 25 percent into a social security account. Those who hire people will have to pay a 25 percent payroll tax.

The tax explanation follows the announcement last month that the government is laying off more than 500,000 public sector workers by March.

The main labor organization, the Cuban Workers Confederation, said the layoffs were part of an effort to change Cuba's labor structure and salary system and increase private sector job opportunities.

Currently, the state employs 95 percent of the official work force.

Earlier this year, Cuban President Raul Castro said his government would scale back its involvement in the national economy and allow more Cubans to operate their own businesses. Mr. Castro said the aim was to create jobs for Cubans employed by the government who will be laid off.

Some information for this report provided by AP.