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Cuba cuts 10% tax on $3-a-minute phone calls between island, U.S.

By Patrick Oppmann, CNN
December 1, 2012 -- Updated 0055 GMT (0855 HKT)
STORY HIGHLIGHTS
  • Cuba eliminates a 10% tax it began in 2000 on phone calls with U.S.
  • Phone calls between the countries typically cost $3 a minute
  • The tax was imposed in response to U.S. sanctions
  • The rate reduction should increase phone calls, Cuba says

Havana, Cuba (CNN) -- The Cuban government on Friday reduced its expensive telephone rates between the island and the United States.

The government is scrapping a 10% tax it imposed on calls between the two countries in 2000, it announced.

The largest population of Cubans outside the island resides in the United States, and calls between the two countries typically top $3 a minute.

"A reduction in the rates to be charged for international calls will favor an increase in international telephone communications to and from our country," the announcement said.

The tax was implemented by then-President Fidel Castro after the U.S. Congress froze Cuban funds in the United States generated by calls between the two countries. The funds were used to pay compensation to the families of three Cuban exile pilots, all U.S. citizens, who were killed when their small planes were shot down by Cuban fighter planes in 1996.

The United States has maintained a trade embargo against Cuba for more than 50 years. There are no formal relations between the Communist country and the United States, which has a diplomatic mission in Havana, and commerce is strictly controlled.

Last month, Cuba announced a change in immigration laws that would give many Cuban exiles the ability to return to the island.

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