Cubans to start paying taxes for the first time

Paying taxes is something many of us are simply resigned to, but not in Cuba, at least not until now. Economic reforms mean thousands of people no longer work for the state, but for themselves. And that's leading to big changes in the communist country.

Cubans to start paying taxes

A Havana car wash has only been open for a few months but business is already rolling in. it's privately owned, one of many small businesses sprouting up across cuba where capitalism, until three years ago, was forbidden.

Owner Yasmani Claro Duran says, "It feel good, thanks to the changes happening in the country and easing of restrictions, people are doing better."

But people doing better means a growing disparity in living standards, something the Cuban revolution was supposed to have abolished.

After Fidel Castro took power nearly everyone worked for the government and made similarly meager salaries. but under after economic reforms initiated by his brother Raul over 400,000 Cubans have started small businesses, some making fortunes, at least compared to those who stayed on the state payroll.

So starting this year many Cubans will do something they have never done previously: pay taxes. Vladimir Regueiro Ale with the National Tax Office Administration says, "It's a form of redistribution that before didn't exist. Social participation was more passive. The taxes are being applied to a sector of the economy that's generating new wealth."

Everyone, except state workers and self employed farmers, will pay this tax. But government officials say in the future there may be taxes on property and state salaries.