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New Tax in Cuba Threatens Consumption in a Hungry Nation AFP/Yahoo! News Cuba has slapped a new customs tax on everyday goods shipped from overseas in a drive that experts say could weaken the economy and sap consumption. The levy took effect Monday and is payable in foreign currency. It targets goods imported by private citizens, often self-employed people who have started up businesses as part of timid reforms undertaken by the communist government in 2011. Carmen Arias, deputy director of the customs service, said the taxes are "a way to counter this non-commercial means of personal enrichment." But economist Mauricio de Miranda disagrees, calling the measure disproportionate and saying it could act as "a self-imposed embargo with a damaging effect on people's living standards." He was alluding to the trade embargo that the United States placed on Cuba half a century ago, after Fidel Castro came to power. In Cuba, where the economy is 90 percent controlled by the state, hundreds of packages and parcels arrive every day, sent by exiled Cubans to their families back home or brought in by travelers who make a profit by reselling the merchandise. Under the new measure, merchandise is taxed at the rate of 10 dollars a kilo after the first three kilos. Foodstuffs -- exempted from such taxes after hurricanes hit Cuba in 2008 -- are also taxed now. That's bad news for privately owned restaurants which, in the absence of a wholesale market in Cuba, relied on such shipments for products they cannot find within Cuba. The new tax "could seriously raise prices of imported consumer goods, the supply of which is scant in the retail trade network," said de Miranda, of the Pontifical Xaverian University in Cali, Colombia. In other countries this kind of levy is imposed to protect local producers. But in Cuba "there is no need to protect any national producer, as the consumer goods industry is incapable of meeting local demand." "If the idea is to discourage the black market and get people to go to state-run stores, these stores would have to be sufficiently stocked at affordable prices," movie-maker Eduardo del Llano wrote in his blog eduardodelllano.wordpress.com. The average Cuban earns less than 20 dollars a month. READ FULL SOURCE ARTICLE The BasicsProject.org informational and educational pamphlet series is now available for Kindle and iPad. Click here to find out more... The New Media Journal and BasicsProject.org are not funded by outside sources. We exist exclusively on tax deductible donations from our readers and contributors. Please make a tax deductible donation today. The BasicsProject.org informational and educational pamphlet series is now available for Kindle and iPad. Click here to find out more... The New Media Journal and BasicsProject.org are not funded by outside sources. We exist exclusively on tax deductible donations from our readers and contributors. Please make a tax deductible donation today.
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