The highly anticipated summer session of Cuba’s National Assembly, which concluded July 22, was dominated by semi-official rumors that legislators would discuss and finally pass two new pieces of legislation: the Migration Law and the Investment Law.

But a few days in advance, the government made an “official clarification” indicating that the two initiatives would be taken up by the National Assembly in December.

Five reports were debated during this most recent session, which was closed to foreign journalists. The most important result was adaptation of Cuba’s first comprehensive tax code since the 1959 communist revolution.

Here are the session’s key achievements:

CENTRAL BANK OF CUBA

Ernesto Medina Villveirán, president of Cuba’s Banco Central, said the current state of defaults — despite having been reduced by 40% this year — remains “crucial and decisive” in Cuba’s economy. Irma Martínez, first vice-president of the bank, said the “cadena de impagos” [chain of defaults] is “one of the problems most affecting Cuba’s finances.”

Cuba’s Ministries of Agriculture, Domestic Trade and CITMA (science, technology and environment), the Institute of Aeronautics and several Consejos de Administración Provinciales (CAPs) hold 85% of such defaults.

Beginning in 2013, the Ministry of Finance and Prices will be in charge of all new policies and adjustments concerning defaults, not the Central Bank. During the first half of 2012, some 49,924 customers had access to the new credit policy, for a total of 347 million pesos.

More than 75% of the portfolio of Cuba’s Banco Nacional de Desarrollo Económico y Social (BANDES) is invested in the agricultural sector, which holds the largest single debt in the country’s banking system.

BUDGET BALANCE REPORT (2011)

Cuba’s fiscal deficit was lower than planned, dropping from 3.8% to 1.7%. That’s the lowest since the 1990s, and far lower than the record high deficit of 2008, when it reached 6.9% (equivalent to 4.2 billion pesos).

The state lost nearly four billion pesos in tax revenue as a result of growing idle inventories, and defaults on hundreds of thousands of home appliances that were sold to the public by way of installments to be paid through the banking system.

Some 77.3% of state subsidies were concentrated in the Ministries of Agriculture, Basic Industries and Light Industry, as well as in the new sugar entity, Azcuba, and several CAPs.

Savings by state entities are slowly growing, reaching 1.5 billion pesos in 2011. Meanwhile, social security covers only 59% of its expenses. The state contributes two billion pesos towards pensions and welfare.

THE NEW TAXATION LAW

Under the comprehensive new tax code, to be introduced gradually, everyone would eventually have to pay income and property taxes for the first time since the 1960s.

Specifically, salaries will be exempt from taxation as long as present economic conditions prevail, while taxes for cuentapropistas (self-employed) will be cut by 3-7%, depending on income.

Farmers in general, including the hundreds of thousands who have received land in usufruct, will benefit from a 50% tax cut. This will also include taxes on hired labor for a period of two years — and four years if additional workers are needed for demanding jobs like clearing marabú weeds.

Sales taxes, as well as taxes on certain products and services and the commodity circulation tax, will be gradually reduced. Taxes on houses and urban land plots will not be enforced until property registration is fully updated and organized.

Houses in bad condition — which define most dwellings in Cuba — will be exempt from such taxes, while houses built on individual land will be exempt from property taxes for five years.

Corporations, businesses and cooperatives will have to start paying taxes to the CAPs. Bonuses and penalties will be enforced as incentives for greater tax discipline.

The recently approved customs tariff — which has caused considerable grumbling in Cuba and among Cuban exiles living abroad — will be submitted to the Council of Minis-ters to be debated. It is unclear when that tax will actually be implemented.

The Council of Ministers will be responsible for drafting taxation and tariff systems in the Zonas de Desarrollo Especial (ZEDs, or special development zones) and other areas of the state economy.

Areas hurt by natural disasters will be ex-empt from all taxes and tariffs for an unspecified number of years; the National Assembly will oversee implementation of this rule.

OTHER IMPORTANT FINDINGS

The Ministry of Finance and Prices reported that, as part of the decentralization process granting greater autonomy to provinces and municipalities, 117 initiatives for local development (IMDL) have been implemented in 51 municipios in 13 provinces.

These are based on four different sources of funding: state (10,678,000 CUC); bank credits (5,069,000 pesos), donations (608,000 CUC) and local income.

Some 85 new projects are being designed, though others were nixed because they were prepared incorrectly or for other reasons.

Alex Trujillo, first vice-minister of tourism, said that during the first semester of 2012, some 1.6 million tourists had visited Cuba, up 5.8% from the same period in 2011.

Inés Chapman Waugh, chief of the National Institute of Water Resources, described the many new aqueducts, drainage systems, re-pairs to dams and reservoirs, and other projects being put in place, along with new tariffs.

State expenditures in this sector has risen sharply, from 50 million pesos in 2000 to 400 million pesos this year.

Antonio Carricarte, first vice-minister of foreign trade and investment, said low production of rice, beans and milk forced the government to spend much more hard currency than anticipated; for example, 300,000 tons of rice had to be purchased to satisfy domestic demand.

Meanwhile, theft of cattle remains a major problem, especially in the provinces of Villa Clara, Las Tunas, Holguín, Santiago de Cuba, Cienfuegos and Ciego de Avila.

CENTRAL COMMITTEE MEETING

Parallel to the National Assembly meeting, the Central Committee of the Communist Party held a gathering at which its president, Politburo member Marino Murillo, delivered a report on the “new far-reaching and in-depth proposals” that form the nucleus of an “updating of the model.”

Following the meeting, these proposals were submitted for approval to the Council of Ministers in the form of a policy paper known as Proyección Estratégica de Trabajo for the 2012-15 period. It consists of 55 key projects or goals to be achieved in line with fully implementing the Lineamientos, or guidelines, adopted after the Sixth Party Congress.

The commission is also finalizing the design of an Economic and Social Model of Development to be debated as a new platform for Cuba’s socialist future.

Leaks from Murillo’s two-hour report to the National Assembly discussing the results of those meetings indicate that an unspecified number of state companies will be partially deregulated by year’s end.

Reuters reported that instead of being mic-romanaged by the ministries, Murillo said the companies would be evaluated by “four or five indicators” such as earnings, the relation of productivity to salaries and their ability to meet the terms of state contracts.

He also announced that 222 small- to medium-sized state entities ranging from shrimp-breeding farms to restaurants are preparing to become co-ops. They’ll lease state property and equipment at 10-year renewable intervals, operate on a market basis, pay taxes like other companies and divide their profits among members as they wish.

Yet it remains to be seen how and when such crucial issues — especially those 55 goals or projects — will be made public.