Cuba Resumes Taxing Imported Food

Cuba on June 19, 2012 reimposed taxes on imported food after an exemption four years ago when the island country was ravaged by devastating hurricanes.

The General Customs Office of Cuba previously announced the new regulation on its official website on June 1, stating that imported food had been taxed since 1979, but the levy was "exceptionally" suspended in 2008 when the powerful hurricanes Gustav, Ike and Paloma caused great damage to its agriculture.

Cubans living in the United States and visiting the island frequently to bring back food supplies for their families have benefited most from the exemption, experts said.

It also greatly benefited the owners of thousands of restaurants and coffee shops throughout the island since October 2010 as a result of the economic reforms promoted by President Raul Castro.

According to official figures, there are 1,618 private restaurants legally registered in the country, and the number of coffee shops and ambulant food vendors is even larger.

Castro's government encourages the private sector as a way to relieve government expenses. The private sector has absorbed thousands of employees dismissed from bloated state-run companies and has increased the state budget through taxes.

Meanwhile, Castro is developing a program to stimulate agricultural production and reduce the country's annual spending on imported food. Cuba spends about 2 billion U.S. dollars every year on food imports, accounting for 80 percent of food consumption in the country.

The program also includes the distribution of about 1.4 million hectares of land to more than 160,000 farmers and granting credits to farmers to buy agricultural machinery.