Cuba Eliminates Tax on US Dollar

March 17, 2016 | Print Print |
The US Dollar and the Cuban Convertible Peso (CUC) Foto: ipsnoticias.net

The US Dollar and the Cuban Convertible Peso (CUC) Foto: ipsnoticias.net

HAVANA TIMES — The Cuban government announced today that it will eliminate its 10% tax on the use of the US dollar on the island. The good news for ordinary Cubans and tourists alike comes in response to Washington’s new measures to further relax the economic embargo on Cuba, reported dpa news.

“The Cuban government has decided to eliminate the 10 percent tax that it applies today on US dollars entering our country,” said Foreign Minister Bruno Rodriguez.

He said the decision should enter into force as soon as US authorities allow Cuban state institutions to use the dollar in transactions in the United States, as announced earlier in the week.

The new relaxations on the embargo, announced by the Obama government on Tuesday, officially entered into force on Wednesday.

Besides allowing Cuban institutions to carry out transactions in dollars in the United States the administration also relaxed travel restrictions on US citizens wishing to visit the island.

The gestures by both governments come as a prelude to president Obama’s historic three-day visit to Cuba starting this coming Sunday.

Rodriguez told a press conference in Havana that in the coming days Cuban state institutions will see if in effect the United States has eliminated restrictions on who can use the dollar.

The elimination of the tax in Cuba will be effective only after verification that the Cuban State can use the dollar in its operations passing through the United States, specified Rodríguez. “While there is financial persecution, the tax remains,” he said.

The 10 percent tax on the US dollar was imposed by the government of Fidel Castro in 2004. Many Cubans in Cuba receive dollar remittances from relatives or friends in the United States, and were the most hurt by the measure.

The tax “has served to compensate the Cuban financial institutions for the risks and costs” caused by the use of the dollar by Cuba internationally, Rodriguez noted.

The inability to use the dollar in international trade was to date one of the major impediments for Cuba to access markets.

Other ways the embargo still hurts Cuba

Rodriguez also criticized as inadequate the measures taken by the Obama administration to relax the embargo. The foreign minister said a number of restrictions still apply to Cuban institutions, for example their inability to export products to the United States.

The sanctions imposed by Washington on the island in the 1960s came in retaliation for the nationalization of US companies in Cuba after the revolution and can only be lifted by the US Congress. However, the Republican majority still opposes lifting the embargo.

Obama’s trip to Cuba on Sunday, the second by a US president to the neighboring island in 88 years, is part of the historic thaw initiated in December 2014, after decades of sharp differences.


What's your opinion?

  • bjmack

    Great progress that will increase the percentage of funds sent to Cuba from the USA for Cuban relatives.

  • Moses Patterson

    To avoid this stupid tax, I would always convert the US dollars that I estimated that I would need to Euros before I left for Cuba. This will be good news for anyone visiting the island who didn’t know about the tax beforehand.

    • Brrr

      Yup. Euros, or Canadian. Easy.

      • Richard Graves

        I tried that Canadian exchange and it cost me more than changing U.S.

        • Brrr

          Either your math is off, or you got ripped off.

          • Canuck Sailor

            Richard’s math isn’t off. I’ve done the math, both while here in the US and while in Cuba by asking at a cadeca about the rates – exchanging US for Canadian doesn’t give you any advantage.

          • Brrr

            Your math is off too. Up until this week, it gave you a 10% advantage.

    • Sky

      Commission free exchange rates would have meant that you did not get a good deal for your Euros; if you paid commission they would have got you that way. For the little saving you would have made (if currency exchange rates allowed you any) I would rather pay Cuban banks the commission than the US who is bullying the rest of the world with FATCA.

      • Moses Patterson

        You are wrong. The exchange fees were marginal in comparison to Castro’s 10% tax. US leadership feels like bullying to those who disagree or dislike the US.

        • Terry Downey

          The problem is… what you deem as leadership is indeed what the rest of world sees as sticking your nose where it doesn’t belong…chiefly to influence your economic interests. If your government spent as much time, money, and energy worrying about your own disenfranchised population at home, the U.S. could really be leading by example.

          • Richard Graves

            Whoa!! Those kind of remarks are not called for. What country do you live in? By the way the majority of us want the embargo lifted. I really would like to know what country you live in and how great is it ..

          • Truthiness2012

            I live in the United States and completely agree with Terry’s comments. The USA has been a big bully not only to Cuba but most of Central America. Why the unprecedented and very harsh embargo on Cuba for over 50 years and not Russia, China, and Middle Eastern countries like Saudia Arabia? Cuba’s “human rights abuses” that are the alleged reason for the continued embargo don’t come close to the human rights abuses in the countries we gladly do business with.

            You have to realize that the spin on Cuba that we get in the USA is mostly propaganda. Cuba had income disparity much like the US has now. Fidel wanted to reform the oligarchy into a socialist system that would take care of everyone, not just the 1%-ers, and remove a horrible US-backed dictator, Batista, from office. All Cubans have free healthcare, free education including college, basic food, basic housing, and other basic needs met. This is more than most American’s have and is an absolute fantasy for any other Central American nation. I have a lot of respect for Castro for doing what no other smaller, less-powerful country has been able to: stand up to the US in order to protect their people, land, and resources from being exploited by US corporations. Cuba is way better off today than the countries that fell victim to the US overthrowing their democratically elected governments, assassinating any democratically-elected leader who tried to make US corps play fair, setting up puppet governments and supporting dictators friendly to US corps exploitation, rigging their elections, and instigating coups and civil wars, like the one in Guatemala that lasted many decades and absolutely ruined the country. Other countries on the receiving end of our bullying include Haiti, Honduras, El Salvador, Nicaragua, and even Iran. Yes, we overthrew the Iranian government in the 50’s.

            Why do Cuban-Americans hate Castro? Because they are the ones that stood to lose. Imagine the Walton family (of Walmart) being told that they get to keep one house, will get paid a fair but equal wage for their work, and will no longer get to control an unfair share of the country’s resources. They’d be eager to leave for a country that supports corrupt capitalism too.

          • Carlyle MacDuff

            Well, you have obviously swallowed the ‘socialismo’ pill – be careful you don’t choke on it! Your comments are somewhat myopic in that you see the world only through the US.
            If you care to read ‘Cuba Lifting the Veil’ you will find the reality of Cuba given and critical commentary about the US relationships with the Latin American countries since 1823. I have to admit however as one whose home is in Cuba, that I am not a US citizen and in consequence am unable to reflect US opinion.

          • Manuel Rivera

            Guys, Do you know when this embargo was placed on Cuba? It was due to the fact that Castro CONFISCATED all American properties. so if they can compensates the owners of all these properties,then we can start talking about lifting the embargo.

          • Moses Patterson

            Maybe so. But that’s a conversation for another blog.

          • Brrr

            Well said, Terry. Without question, American interference is Cuba’s biggest problem (just as it is in many other third world countries that the US exploits).

  • Gordon Robinson

    Lots of changes this week. I have booked my next research trip # 91 – Marea del Portillo resort in Granma. I rate it as the best rural resort in Cuba. Carnival cruise line starts thei Miami to Cuba cruises in May. Americans are very good tippers so the removal of the tax will help the Cubans working on the cruise ships.

  • CJ

    I can hardly wait to visit beautiful Cuba!!

  • Alfonso Huerta

    Does anybody can tell if this is effective now? or still charging 10% tax?

  • Truthiness2012

    I’m heading back to Cuba soon and wondering if the 10% tax has been lifted? If not, I’ll pay it to the Cuban government before I’ll pay fees to US banks to convert to Canadian or Euros to avoid the tax. At least the Cuban government will use it to take care of their people and it’s the least I can do in protest of the ridiculous and unwarranted US embargo.

    • editorht

      No the tax was never lifted as the US never let Cuba use dollars in the US despite the announcement from the Obama administration. The latter was a precondition put by Cuba on lifting the tax.