Cuba broadens use of dollars, eliminates 10% tax on greenback

Record ID: 1562788

  • Title: Cuba broadens use of dollars, eliminates 10% tax on greenback
  • Date: 17th July 2020
  • Summary: HAVANA, CUBA (JULY 16, 2020) (REUTERS) VARIOUS OF LOCALS WATCHING TV IN HOME (SOUNDBITE) (Spanish) LOCAL RETIREE, ANGEL IGNACIO LEON, SAYING: "They (authorities) are going to open up this coverage (of U.S. dollars in the local economy). Of course there are many people who get remittances. Those people will get the benefits. Now my question is, 'who doesn't receive it (remittances)?' How do we play ball?"
  • Embargoed: 31st July 2020 03:43
  • Keywords: Cuba Havana President Miguel Diaz-Canel U.S. dollars economy
  • Location: HAVANA, CUBA
  • City: HAVANA, CUBA
  • Country: Cuba
  • Topics: Government/Politics
  • Reuters ID: LVA005CN756PZ
  • Aspect Ratio: 16:9
  • Story Text: Cuba said on Thursday (July 16) it will allow some stores to sell food, personal hygiene and other consumer goods in U.S. dollars and will eliminate a 10 percent tax on the greenback, as the import dependent country struggles with a grave shortage of convertible currency to purchase goods abroad.
    The measure is just one of a list of reforms the government said it would detail and implement in the coming months such as expanding the private sector.
    The Caribbean country, which monopolises retail and foreign trade, faced a liquidity crisis even before the pandemic shuttered tourism and hit other revenue earners due to the implosion of ally Venezuela's economy and the tightening of the decades-old U.S. trade embargo under President Donald Trump.
    Pandemic fallout has led to shortages of food, medicine and other goods and long lines at retail outlets.
    The economy is forecast to decline nearly 10 percent this year after stagnating in 2019.
    The government opened around 80 "dollar stores" late last year selling items such as home appliances, motor bikes and car parts that it buys abroad in tradable currencies. It added used cars earlier this year.
    There are currently two currencies, the peso and the convertible peso, which is valued at 24 pesos, circulating in Cuba. Possession of the dollar and other tradable currencies is legal, but they have previously not been deemed legal tender for purchases.
    Cubans who patronise the dollar stores need a dollar-denominated bank card from an account opened with tradable currencies, such as the dollar or euro. People may obtain those tradable currencies through offshore remittances or by other means such as exchanging local pesos on the street.
    (Production: Rodrigo Gutierrez, Nelson Gonzalez, Anett Rios, Mario Fuentes, Paul Vieira)
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2020. Open For Restrictions - http://about.reuters.com/fulllegal.asp
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