The Cuban government approved the update of the policy for the transfer of ownership, marketing, and importation of motor vehicles, trailers, and semitrailers, as announced by Prime Minister Manuel Marrero Cruz during the fourth ordinary session of the National Assembly in its tenth legislature.
Marrero explained that they are currently finalizing the last details of the complementary legal regulations, which will be published before the end of the year. This new policy aims to establish a more updated framework for vehicle management in the country, which has traditionally faced restrictions and high costs in buying and selling, both in the state market and in the informal sector.
What is expected?
The update could involve changes in:
Procedures for the transfer of vehicle ownership.
New conditions for the importation of vehicles and their parts.
Regulation of marketing in state and private markets.
These modifications could significantly impact vehicle access and circulation, a sector characterized by economic and regulatory constraints.
Impact on citizens
Although the authorities have not outlined the latest changes in detail, the Cuban population hopes that these regulations will alleviate some of the current challenges related to access to vehicles. In particular, importing has historically been a challenge due to high tariffs and restrictions imposed by the state.
The release of these regulations will be crucial to understanding how the government intends to balance vehicle demand with the country's economic conditions, at a time when costs and accessibility pose significant challenges for Cubans.
What do we know?
In the past month of September, Minister Eduardo Rodríguez Dávila reported that among the new measures adopted by the Cuban government in the transportation sector is the authorization of the buying and selling of vehicles between individuals and companies.
Until now, individuals have been able to transfer ownership of a car to one another, as have legal entities among themselves; however, legal entities were not able to transfer ownership to individuals.
"With the new decisions, the transfer of property among all natural and legal persons is now permitted. It is important to note that, in the case of state-owned or state-participated legal entities, the transfer of property to a natural person requires approval from the Council of Ministers," he said.
"For example, a micro, small, and medium-sized enterprise (Mipyme) can transfer a vehicle it owns to an individual, just like a religious organization, a foreign representative office in Cuba, or a branch," he elaborated.
The executive added that the procedure is the same as the one currently used for the transfer of property between individuals, which takes place before a public notary, involving the payment of the transaction value and the corresponding tax, all through the bank.
The prohibition for foreign diplomatic legal entities to buy or sell a vehicle to an individual remains in effect.
Rodríguez Dávila added that individuals can purchase vehicles from authorized dealers with convertible currency, IMPEXPORT and CIMEX S.A.
"The vehicles for sale come from imports and those that are retired from tourism rentals. The sale prices are determined through market correlation among individuals and have a markup that ranges between 350% and 500%. Of this, 30% accounts for the distributor's commercial margin, while the remainder constitutes a special tax that, although collected in USD or MLC, is credited in national currency at an exchange rate of 1x24 into a fund managed by the Ministry of Transportation," he explained.
"In the case of legal entities, the selling price is the acquisition or import cost, plus a commercial margin of up to 30%. There is also another tax on the amount that applies to motorcycles, cars, rural cars, and trucks, of 100%, 150%, and 200%," he specified.
This controversial issue has sparked criticism against the regime due to the high prices of imported cars in Cuba, making it an impossible dream for highly skilled professionals in the country.
The leader also shared recent data on the import prices of vehicles in Cuba, along with infographics that detail how the government determines the prices of imported vehicles.
It was specified that they used a hypothetical value of 10,000 USD "to facilitate understanding." To determine the final price of the vehicles, the Supplier's Price delivered in Cuba is considered, which is the initial value of the vehicle, including freight and insurance. This base price in the infographic is 10,000 USD or euros.
To this base price, Importation Fees are added, which include tariffs, customs services, handling, and transportation of the vehicle, amounting to approximately 6% of the supplier's price, equivalent to 600 USD or euros.
The next component is the Commercial Margin Rate, which is a margin applied by the selling entity in Cuba. This margin can go up to 20% of the base price, resulting in an increase of 2,120 USD or euros, bringing the selling price of the distributor to 12,720 USD or euros.
Additionally, a Special Tax by Segment or Category is applied, which varies depending on the type of vehicle. For luxury cars, this tax is set at 35%, equivalent to 4,452 USD or euros, while for other types of vehicles, it can be 25% or 15%.
The total amount to be paid by the buyer is determined by adding all these components together. For example, a car, SUV, or pickup truck has a final price of 15,900 USD or euros; a luxury car reaches 17,172 USD or euros; while vehicles of other categories, such as minibuses, motorcycles, or tricycles, range from 14,628 to 15,264 USD or euros.
Cubans were unable to purchase motorcycles, cars, trucks, and minibuses, whether new or used, until 2013, when Raúl Castro authorized the purchase of both new and second-hand vehicles, but only through the government and with a 100% tax.
Until then, those interested had to obtain personal approval from the Vice President of the country, commonly referred to as the "letter."
In 2011, the regime allowed the buying and selling of used cars among Cubans, but it did not eliminate the requirement for the vice president's signature. Additionally, new cars could not be purchased.
In November, the Ministry of Transport of Cuba announced that the implementation of updates to the vehicle marketing policy in the country would be delayed due to the need to align the regulations with the involved agencies. Now, Marrero Cruz stated that the final information would soon be made public.
Frequently Asked Questions about the New Regulations for Vehicles in Cuba
What are the main changes in the buying and selling of vehicles in Cuba?
The new regulations allow for the transfer of vehicle ownership between all individuals and legal entities, although in the case of entities with state participation, approval from the Council of Ministers is required for the transfer to a natural person. This marks a significant change in the vehicle buying and selling policy in Cuba, broadening access and reducing some previous restrictions.
How will the new regulations affect the price of imported vehicles in Cuba?
The new regulations include a significant reduction in the prices of imported vehicles, which could now cost around 15,900 USD, compared to current prices exceeding 50,000 USD. This measure aims to make it easier for Cubans to access vehicles, although the prices may still be unaffordable for many.
What changes have been made to the importation of vehicles for Cubans on missions abroad?
For Cubans on missions abroad, the importation of economical or mid-range vehicles is allowed, provided that customs duties in convertible currency are paid. Additionally, it is now required to have completed a minimum of two years of continuous service, and there are options for tax-exempt purchases in Cuba.
What impact could these regulations have on access to vehicles in Cuba?
These regulations aim to improve access to vehicles in Cuba, although the actual impact will depend on the implementation and effectiveness of the complementary regulations. Price reductions and the easing of property transfer are important steps, but economic challenges remain that could limit their effectiveness.
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