Apr. 15 is a busy day in the United States as people from all walks of life race to finish their annual tax returns to both federal and state tax agencies.

In Cuba, though, the very idea of filing a tax return was non-existent until Raúl Castro’s reforms opened the door for self-employment.

With small businesses booming throughout the island, the government introduced a new tax code on Jan. 1 to claim its share of the new economy the first of its kind since the 1959 revolution.

Cuban academic Saira Pons Pérez of Havana’s Centro de Estudios de la Economía Cubana conceded that it’ll take time for a culture of paying taxes to take hold among the self-employed and small businesses.

“Under-declaring taxes is a very common fact,” said Pons, speaking last month at New York’s CUNY Graduate School. “Not only because of the little taxpaying culture that exists, but also for the [Cuban government’s] little-developed mechanisms for control.”

A progressive tax system is now in effect, ranging from 15% of earnings for those making 10,000 pesos ($400) annually, to 50% for those making more than 50,000 pesos ($2,000). Pons admits that this penalizes business growth.

The tax form, known as the declaración jurada, must be filed to the Oficina Nacional de Administración Tributaria (ONAT) Cuba’s equivalent of the IRS by Apr. 30 of the following year.

Along with the income tax, small businesses must also now pay a tax to hire workers as well as a contribution toward social security.

“There are penalties for those who pay late,” she explained. “These never exceed 30% of the amount owed. Up until now, there has never been a case of anyone going to jail over overdue taxes. [For such workers] they simply take away the license for that person to engage in self-employment.”

Interestingly, the Cuban tax code does permit deductions, although nowhere near as itemized as the U.S. tax system.

“For small businesses, they are not permitted to make itemized deductions for specific costs,” she said. “Instead they are permitted a standard deduction depending on their profession. For example, restaurant owners can deduct 50% of their gross income, artisans [producers or vendors of footwear, religious articles, etc.) 30% of their gross income, apartment renters 20%, and PC programmers 10% the rate goes from 50% to 10%”. In fact, she said, Cuba’s new tax regime has spawned a cottage industry: tax preparers. Since small businesses in particular may not want to be bothered with handling such paperwork, an army of document preparers has surfaced to help.

Known as “tenedores de libros,” these specialists now exceed 200 in Havana alone.