Cuba Places Tax on Telephone Calls Between Cuba, US

By Jim Burns | July 7, 2008 | 8:08 PM EDT

( - Cuba's Castro government has done what it threatened to do - slap a ten percent tax on each minute of telephone calls placed to and from the United States.

Radio Havana reported Thursday that the Cuban telecommunications company, ETECSA, had calculated the tax will amount to 24.5 cents per minute. The Castro government said the tax will be charged until "the US government returns illegally frozen Cuban funds."

The Castro government said money collected from the tax will go toward purchasing medicine and medical equipment. The phone tax is applicable only to Cuba-US telephone traffic and, according to the Castro government, will not have any impact on communications between Cuba and other countries.

The Castro government says it imposed the tax because of legislation now awaiting President Clinton's signature that would allow the U.S. to freeze Cuban funds to compensate relatives of Brothers to the Rescue, a Cuban exile group.

Several members of that group died in 1996, when Cuban MIGs shot down Brothers to the Rescue aircraft in the Florida Straits.

The Castro government warned the United States that "any attempt by US authorities to confiscate or freeze the money resulting from the 10 percent tax increase will prompt the adoption of other measures that could include a total blackout of direct or indirect telephone communications between the two countries."

Joe Garcia, executive director of the Cuban American National Foundation called the Cuban government decree is tantamount to extortion.

"The horror of this is that there are millions of people who need to talk to their families. I think anytime that people are extorted, they suffer. The people from Cuba are going to suffer because they're going to have less contact with their families. The people from Miami are going to suffer because they want to keep tabs on their families," Garcia said in a statement.

Several telephone companies, including A-T-and T, Sprint, Telefonica of Puerto Rico and Worldcom, among others, provide telephone service to Cuba. The majority of overseas phone calls to Cuba, according to some experts, come from the United States because of better technology and lower costs.