The “Lago de los sueños” recreational area has been awarded financing from the provincial tax fund to support maintenance of facilities. Photo: Miguel Febles Hernández

CAMAGÜEY.–Over many years, municipalities became accustomed to receiving all resources needed to sustain their economic and social work from the central government, but they are now entering the new world of autonomy, making decisions about how to use funds generated locally.

The first experience, not without mistakes and headaches, was the implementation of local development taxes, in accordance with Law No. 113, which facilitates access by Municipal Administrative Councils to previously unavailable finances.

Approved July 23, 2012, the law’s Article 305 establishes a tax on “income from sales of goods and services obtained by enterprises, mercantile associations, and cooperatives, on their own, at facilities in each province.”

Known at the institutional level as the “One percent contribution,” the tax has provided cash to fund programs of social and economic impact that support sustainable development at the municipal level, responsibly managed by local governments.

This is a transition from a passive model - waiting for solutions “from above” - to a local process that encourages development of the intelligence existent in all regions, to propose and carry out projects to improve the people’s quality of life.


According to information provided by Luis García López, provincial director of Finances and Prices, Camagüey projected raising 56 million pesos through this tax this year, of which 36.4 million had been paid by the end of August.

“Of this amount,” he explained, “more than 12 million has been distributed, in accordance with regulations established in approved procedures, which indicate that local governments may have access to 50% of the total, as long as they collect taxes owed, which are those that will add to the municipal budget.”

Some construction expenses at Águedo Morales Elementary School were covered with funds from the provincial tax. Photo: Miguel Febles Hernández

In fact, several municipalities in Camagüey have not been awarded funds from this revenue, precisely because they did not collect projected taxes, leaving them in a tight situation, with little to support local development.

“I always tell municipal leaders that we still devote more time on spending what we have, rather than meeting projections (for revenue) and finding ways to generate more income for the budget,” stated Isabel González Cárdenas, president of the Provincial Assembly of People’s Power.

The formula is clear: the more efficient and productive entities are - be they locally, provincially, or nationally managed – the greater income will be obtained, and thus a greater tax contribution is made to support development in the municipalities where their workers live.


“During these first few years that this financing has been available, municipalities have focused on solving problems raised by the population, which have accumulated over the years, some of which have been included in the plans approved,” stated the provincial government leader.

The list of maintenance and repair works completed with the use of these funds is diverse and extensive, including schools, clinics, rest homes for the elderly, movie theaters, libraries, sports facilities, roads, bakeries, markets, playgrounds, shopping and recreation centers.

Other amounts have also been allocated, still insufficiently, to increase productive capacity within local construction materials industries, to establish mini food processing plants, recover agricultural land, erect commercial centers, and finance projects that could generate economic progress.

“On the basis of experience already gained,” González Cárdenas said, “today we have the responsibility to direct our priorities toward those areas and sectors that will provide greater income to the municipality, and thus, have the opportunity to do many more things.”

Also contributing toward this end is the prerogative afforded the Provincial Administrative Council to retain up to 10% of the funds generated in areas making larger contributions, to redistribute these to benefit areas with greater social and economic needs, to achieve more balanced development across the region.


“From now on, it’s up to us to work for better technical preparation of plans for what to do with funds from the provincial tax, so that what is done is sustainable. This is something we must, and can, improve,” insists Luis Sisto Mora, vice president of the provincial administration.

While confident that the finances have been put to good use, he emphasized the importance of municipalities conducting studies and prioritizing projects that could mean greater income, and that decisions not be left to spontaneity or improvisation.

Called upon to play a more active role in this process are economic commissions charged with conducting pre-evaluations of all proposals, to ensure that when Municipal Administrative Councils consider approval of a project, the idea is well thought out and includes a feasibility study.

“All this prior preparation, which also includes a proposed budget, is necessary - that is to say, never go with the first proposal. It has a preventative character, allows for acting with common sense and avoiding superficiality in analysis, and in decision making,” Sisto reiterated.

As any good Cuban would say, the ball is in the municipality’s court, where with intelligence, moderation, and a strategic vision, authorities can establish comprehensive development programs and self-management, with a view toward not only immediate needs, but those of tomorrow as well.


Cuba’s proposed new Constitution states: The municipality is the local society organized by law, which constitutes the primary and fundamental political unit of national organization; it has autonomy and incorporated status, for all legal purposes, with a territorial extension determined by the community, economic, and social relations of its population and the interests of the nation, with the purpose of meeting local needs. It has its own income and receives allocations from the government of the Republic, to advance economic progress, social development in its territory, and other state goals, under the leadership of an Assembly of People’s Power and its Administration Council. (Article 163)