THE CUBA REVIEW 19 



CHAPTER V 



Article XLIV. Emphatic protest is made against any taxations on the earnings 

 of the companies, firms, individuals, corporations or associations which are subject to 

 payment to the government of the "1 per cent. Sales Tax," as the financial conditions 

 of those subject to paying the "1 per cent. Sales Tax" does not permit additional 

 taxation on profits which they may make, owing to the fact that practically all of these 

 companies are now heavily indebted, and provision must be made in the future for 

 supplying profits from which to liquidate said indebtedness. 



Such earnings as are required to pay the 8 per cent, profits tax and the 6 per cent, 

 profits tax, a rendition of statement of accounts showing net profit at the end of each 

 six months should be made, but the tax collectable should be based on the operation 

 of a twelve months period, and paid at the end of said twelve month period, said 

 period to be designated by the government. 



It is unfair to base and collect this tax on the operation of companies for six 

 months period, as general conditions and evolution of commerce in Cuba are such that 

 many companies make such profits as are made, in certain six months and losses in 

 the following six months of a twelve month period, thereby any taxation on six months 

 period unjustly taxes said companies without permitting the averaging of the losses 

 sustained in its business. 



This article as now worded requires all stock companies (excepting those specifically 

 stated as subject to a 6 per cent, tax), to pay 8 per cent, and permits the exemption 

 of firms, individuals or other organizations which is an unfair burden on stock com- 

 panies particularly, inasmuch as said firms, individuals or other organizations may be 

 in the same line of business and competitors of said stock companies and without this 

 taxation. 



This article also compels the double taxation on net earnings derived from business, 

 when said net earnings of one stock company or utility become the earnings of another 

 holding or owning company and provision should be made that this tax is applicable 

 to net earnings at the source of same. 



Much ambiguity has arisen in the operation of present form of net earnings tax 

 due to difference of opinion of what constitutes "net earnings." 



Article XLVI. Requiring the rendition of statement of quantities by owner, 

 administrator or party in charge of the ingenio or sugar mill every 15 days, places 

 unnecessary work and expense upon same, rendition of such statement every 30 days 

 would give the government the necessary data for the collection of this tax and involves 

 less work and expense upon those making rendition of statement. 



Articles XLVII, XLVIII and XLIX. The taxation provided for in these articles 

 is in reality a similar tax to that provided for as Import Duties and should be considered 

 in connection with the revision of the Import Duties Tariff and should be stricken from 

 this bill, thereby eliminating double taxation on the same commodity. 



Article L. With the general financial condition of the sugar industry on the Island 

 of Cuba and with the heavy indebtedness which each of these companies is now in 

 and in order to provide means for liquidating said indebtedness in the future without 

 further demoralization and losses in the sugar industry, reflecting itself on every line 

 of business and industry in the country, opportunity must be given said companies for 

 liquidating such indebtedness and the doubling of the taxation from 10 cents to 20 

 cents per sack of sugar at a price of 3 cents is increased taxation, which this industry 

 is unable to bear, as the profit available to said industry at 3 cents sugar does not 

 permit same in fairness to the liquidation of its existing indebtedness. This increase to 

 20 cents should not take place until the price of sugar is 5 cents. 



Article LVI. Sand is customarily sold at approximately $1.00 per cubic meter 

 at the place of extraction and a tax of 20 cents per meter is an increased cost of 

 production of 20 per cent. Said sand is used primarily in the improvement of the 

 country, such as buildings, roads and other construction work and increasing the cost 

 of such retards and burdens these improvements. Furthermore, the removal of sand 



