Cuba Eliminates Tax on US DollarMarch 17, 2016 | Print |
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.