This is how the new taxes impact car prices in Cuba.

The Government of Cuba implemented new taxes for vehicle classification, which will directly impact the final price of the cars both new and imported.

This measure, which is part of a reform of the automotive tax system, aims to regulate the market and raise funds for the Fund for the Development and Sustainability of Public Transport, aseguran from the ruling party this week.

Vehicle classification and their new taxes

The cars are now grouped together In four categories (A, B, C and D), according to their dimensions and engine displacement, these are the new taxes:

• Category A: Cars between 3300 mm and 3700 mm long, with engines up to 1.6 liters. Tax: 25%.

• Category B: From 3700 mm to 4250 mm, up to 1.8 liters. Tax: 25%.

• Category C: Between 4250 mm and 4500 mm, up to 2.0 liters. Tax: 25%.

• Category D: Over 4500 mm and engines larger than 2.0 liters. Tax: 35%.

All rural cars, as well as those in categories D, E and F, are considered high end, which makes them subject to higher taxes.

How are car sales prices in Cuba determined by these new taxes?

The final price of a car in Cuba today is calculated based on several factors. First, the supplier's price (including cost, freight, and insurance). Import fees (6% of the supplier's price).

Then, the commercial margin rate (up to 20% on the supplier's price + import) and the special segment or range tax, which can reach up to 35% of the sales price.

In addition, if a person acquires more than two vehicles, from the third onwards a progressive tax ranging from 25% to 100% of the car's value.

This new pricing system makes Buying a car in Cuba is considerably more expensive.

For example, a high-end vehicle (category D) could see its price increased by more than a third due to taxes alone.

Furthermore, the total cost includes multiple margins that make the final prices far higher than the vehicle's actual value on the international market.