Cuba increases taxes levied on imported goods

HAVANA – Cuba has announced the imposition of stiff new import taxes that could substantially affect private entrepreneurs trying to get new businesses off the ground and many others who rely on informal shipments of merchandise from overseas.

Starting in September, Cubans who come in and out of the country more than once a year will have to pay the equivalent of $10 a kilogram or more for imports, a fortune in a country where salaries average the equivalent of about $20 a month. Nonresidents, including CubanAmericans visiting relatives, would have to pay the new rates even if they only make one trip to the island.

About a quarter of a million Cubans have started new businesses under freemarket reforms instituted by President Raul Castro at the end of 2010. Many have opened cafés, repair shops, clothing stalls and outdoor stands that rely on products from abroad.

Cubans with permission to travel often fund their trips by acting as mules, coming back with bags stuffed with clothes, electronic goods, diapers and other items hard to find on the island. Until now, they would pay only about 50 cents a kilo in import duties, with set fees for big-ticket items such as televisions and microwaves. Food imports were free until this year when the government began charging duties.

The new duties were posted quietly on the website of the government’s Official Gazette and are dated July 2.

State-run newspapers have carried no mention of the new duties, but a website of the official Radio Rebelde station ran a short article Tuesday morning, and a vague mention of discussions about import taxes was made on a late-night newscast.

Some details of the new law were confusing, given that the decree was published in dense legalese and appeared to contradict itself, and that no government officials were available to make sense of it.

At times, the decree refers to taxes being imposed based on weight, and at times on the value of merchandise.

Either way, it was clear to private business owners that they would be paying much more, and they were not happy about it.

“It’s a disaster,” said Luis Carlos Espinosa, a 42-yearold who has set up a small stand in Central Havana selling jeans, colourful blouses and children’s clothing, and who had heard rumours of the new taxes but had not yet seen the published law. “It hurts us in every way. Where are we going to get the merchandise? There is no wholesale market here.”