Cuban tax on U.S dollar to be cancelled

Posted: 18-Mar-16 16:02

Yesterday Cuban government officials announced that a 10 percent penalty on dollars exchanged in their territory could be suspended soon, if a new package of measures that the U.S. government announced this week redounds to the island's financial sector advantage. The package, which is aimed at relaxing the embargo policy, will be the second big move of Barack Obama's administration towards Cuba in one year.

Cuban tax on U.S dollar to be cancelled

If Cuba eliminates a 10 percent tax on the U.S dollar in the near future, as it was announced by its government yesterday, more Americans will be encouraged to go to the island. The country has become one of the favourite and most desirable destinations for U.S. citizens in recent times, but they still face limitations to go there.

Cuban minister of Foreign Affairs, Bruno Rodriguez, confirmed at a press conference held in Havana yesterday that the island´s government is prepared to withdraw its penalty on U.S. dollars exchanged in Cuba on the condition that the U.S. remove its sanctions and penalties on international banks making business with Cuba.

A revaluation of the American official currency will further stimulate foreign travellers to go to the island, and at the same time will be very beneficial for the tourism sector, one of the pillars of Cuba’s national economy.

The gravamen, imposed to any cash transaction made in the island involving U.S. dollars, was enforced 12 years ago. In Rodríguez’s words, the measure was implemented as a defence mechanism to counteract the strengthening of financial persecution of the U.S. government on Cuba and its commercial allies.

“As long as there is financial persecution there will be gravamen, only after verifying that it’s safe for us to conduct transactions with international banks, will this gravamen be removed”

Over the next few days Rodriguez announced that the Cuban government will be testing the removal of the U.S. imposed financial barriers on international money transfers -announced by U.S. goverment this week as well- by carrying out transactions with banking authorities in third countries and the U.S., in order to see whether these transactions can in fact be made without being subject to those “unjust and intimidating measures”. If that proves successful, the removal of the penalty on the use of U.S. dollars will ensue.

The American embargo is a long-standing policy that constraints the possibilities of the Caribbean nation to trade with other countries and to integrate the international economic and financial system. It also prohibits Americans to go to Cuba as tourists.

But on 17th December 2014, presidents Barack Obama and Raul Castro started to negotiate the easing of historic political tensions between both nations. With that purpose, on January last year, the commander in chief at the White House released a package of measures that included the creation of new licenses allowing more Americans to travel to Cuba.

A second round of announcements has preceded Obama´s first visit to the Caribbean country which will take place from 21st to 22nd March. It is expected that this new bundle of measures will allow Cuban banks to effectively use American dollars on their international transactions.

The Cuban minister of Foreign Affairs talked specifically about the measures that widen opportunities for Americans to go to Cuba if these are justified by educational or cultural purposes. However, he added that the U.S government still maintains legal prohibitions on travelling for leisure and recreational purposes.

Next week Obama will become the first U.S. president in office going to Cuba in nearly a century. He announced his official visit in February, and the Cuban government has declared that he will be welcomed by the Cuban people.


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