In a move that has sparked significant debate, the Cuban government has unveiled new regulations detailing the pricing for importing and selling vehicles within the country. Announced in the Official Gazette No. 128 on December 30, 2024, these rules will come into effect on January 1, 2025, and have stirred controversy due to the steep costs that prospective vehicle buyers will face.
Converted to U.S. dollars at the official exchange rate, these prices present a daunting challenge even for those with incomes above the national average. According to the regulation, a standard internal combustion car less than five years old will be priced at 2,040,000 Cuban pesos, equivalent to approximately $15,900. Vehicles between 5 and 15 years of age will cost 1,020,000 CUP ($7,950), and those older than 15 years will have a price tag of 510,000 CUP, about $4,000.
High-end cars come with even steeper prices, exceeding 3,500,000 CUP, which translates to more than $27,000. This pricing is far from attainable for the majority of Cubans, whose average monthly salary barely covers basic living expenses.
The exorbitant costs extend beyond cars. New motorcycles, often seen as a more affordable transportation option, also carry prohibitive price tags. A motorcycle less than five years old will cost 265,000 CUP, translating to over $2,000. Moreover, these figures exclude additional taxes such as the Special Tax on Products and Services, which further raises the final price.
This tax, applied progressively based on the type of vehicle and its energy source, can reach up to 35% for internal combustion cars and luxury models. While the government has attempted to encourage electric vehicle usage through fiscal incentives, the regulations impose extra requirements that increase acquisition costs.
Electric cars benefit from lower taxes and, in some cases, exemption from the Special Tax, yet buyers must purchase charging stations, adding to their initial high cost and limiting access to these environmentally friendly options. Only a small segment of the population will enjoy significant benefits. Cuban workers abroad and diplomatic personnel, for instance, can import vehicles at reduced prices with tax exemptions, a provision that favors a privileged minority while leaving the majority without such advantages.
The new legal framework also limits the number of vehicles an individual can purchase over five years, capping it at six. From the third vehicle onward, taxes increase sharply, reaching up to 100% of the vehicle's price for a sixth purchase. These measures aim to regulate the market but also highlight the elitist nature of the policy.
Given Cuba's economic context of low wages, high inflation, and limited opportunities, these prices remain out of reach for most citizens. Owning a car, far from being a basic necessity, continues to be a luxury reserved for a select few. Meanwhile, the general population remains dependent on an outdated and overburdened public transportation system that fails to adequately address mobility issues.
Understanding Cuba's Vehicle Import Regulations
What are the new car prices in Cuba?
A standard car less than five years old is priced at 2,040,000 CUP ($15,900), while cars between 5 and 15 years cost 1,020,000 CUP ($7,950), and those over 15 years are 510,000 CUP ($4,000).
How does the Special Tax on Products and Services affect car prices?
This tax can add up to 35% to the price of internal combustion cars and luxury models, significantly increasing their final cost.
Are there any incentives for purchasing electric vehicles in Cuba?
Electric vehicles benefit from lower taxes, and some are exempt from the Special Tax. However, buyers must also invest in charging stations, which adds to the overall cost.
Who benefits from reduced vehicle import prices and tax exemptions?
Cuban workers abroad and diplomatic personnel can import vehicles at reduced prices with tax exemptions, benefiting a small privileged sector of the population.