WORLD TRADE  
ORGANIZATION  G/SCM/N/71/VCT 
20 March 2002 
 (02-1435) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
  
SUBSIDIES 
 
New and Full Notification Pursuant to  Article XVI:1 of the GATT 1994 and
 
Article 25 of the Agreement on Subs idies and Countervailing Measures  
 
SAINT VINCENT AND THE GRENADINES 
 
 
 The following communication, dated 28 February 2002, has been received from the Embassy 
of Saint Vincent and the Grenadines in Brussels. 
 
_______________ 
 
 
1. The attached notification, as per paragraph 1( b) of the procedures for extension under SCM 
Article 27.4 in document G/SCM/39, is submitted in respect of the programmes identified in the 
initial documentation (G/SCM/N/74VCT). 
 
2. Programme descriptions are as of 1 September 2001.  3.  Where some programmes that were mentione d in the initial documentation are not mentioned 
in the attached notification, particularly the Hote ls Aid Act No. 16 of 1988, the Industrial Incentive 
Credit Scheme and the Marketing Corporation Support Programme to Agricultural Farmers (i.e. non-
banana farmers), it is because on further analysis it was determined that Article 27.4 is not relevant to 
those programmes.  4. The legislation (or the relevant portions, as  appropriate) underlying the notified programmes 
is attached to the notification. G/SCM/N/71/VCT 
Page 2  
 
 Fiscal Incentives Act No. 5 of 1982 amended by Act 20 of 1987 and Act 16 of 1991 
 
1. Title of the subsidy programme, if relevant, or brief description or identification to be provided  
 
 Fiscal Incentives Act No. 5 of 1982 amended by Act 20 of 1987 and Act 16 of 1991. 
 
 This is an Act to provide incentives to industry. 
 2. Period covered by the notification
 
 
 As of 1 September 2001. 
 3. Policy objective and/or purpose of the subsidy
 
 
 The objective and/or purpose of the subsidy are to stimulate export performance, support investment, economic activity and promote dive rsification in traditional and non-traditional 
products. 
 4. Background and authority. for the subsidy (including identification of the legislation unde
r which 
it is granted ) 
  The Fiscal Incentives programme finds is legal ba sis in the Fiscal Incentives Act No. 5 of 1982, 
amended by Act No. 20 of 1987 and Act No. 16 of 1991.  
 
 This Act was passed to give effect to an agreem ent on the harmonization of fiscal incentives to 
industry among CARICOM countries. 
 
Authority 
 
-  Fiscal Incentives Act No. 5 of 1982 amended by 
 
-  Act 20 of 1987 
 
- Act 16 of 1991 
 5. Form of subsidy (i.e., grant, loan, tax concession, etc
.) 
 
 The Fiscal Incentives Act provides for tax concessions by way of the following:  
• Exemption of import duties, consumption taxes on plant, equipment, machinery, spare 
parts, raw materials, or  components thereof; 
 
 •  exemption of income tax;  
 •  exemption of income tax on exports profits by way of tax credits. 
 
6. To whom and how the subsidy is provided (whether to producers, exporters or others), 
through what mechanisms, whether it is a fixed su m or fluctuating amount per unit and, if the 
latter, how the amount is determined  
 
 The main beneficiaries of the Fiscal Incentives scheme are ma nufacturing and agro-processing 
enterprises. This incentive scheme is managed and administered by the Ministry of Telecommunications, Science, Technology and Industry. Applications for incentive benefits under 
this scheme are submitted to the aforementioned Mi nistry, which recommends to Cabinet the level 
and type of concessions to be granted.  G/SCM/N/71/VCT 
 Page 3 
 
 
  
 The Fiscal Incentives Act No. 5 of 1982, as amended by Act No. 20 of 1987 and Act. No. 16 of 
1991, allows for the granting of tax holidays for the manufacture of approved products by 
approved enterprises and can be classified into five (5) categories as follows: 
 
(i)  Group I Enterprises, up to 15 years, in which local value added is 50 per cent or more of 
sales; 
 (ii) Group II Enterprises, up to 12 years, in which local va lue added is between 25 per cent 
and 50 per cent; 
 
(iii) Group III Enterprises, up to 10 years, in which local value added is between 10 per cent 
and 25 per cent; 
 
(iv) Enclave Enterprises, up to 15 years, in which production is exclusively for export; and 
 
(v) Capital Intensive Enterprises, up to 15 years, if there is an investment of not less than 
US$25 million. 
 
 The Act provides for income tax relief in the form  of tax credits to enterprises.  This relief is 
contingent on exportation and is granted on export profits of an enterprise accruing from its exports of the approved products.  Relief is provid ed for non-traditional exports to all countries, 
however, in the case of exports to Guyana, Jamaica and Trinidad and Tobago, the period of relief 
is only for five years immediately following the expi ration of the tax:  holiday period.  Relief is 
granted if export profits amount to ten per cent or more of the entire profit of the enterprise in 
accordance with the following: 
 
 
Amount of export profits expressed as a 
percentage of the entire profits Maximum percentage of tax relief 
10% or more but less that 21% 25% 
21% or more but less that 41% 35% 
41% or more but less than 61% 45% 
61% or more 50% 
 
 
Export profits is determined by the following formula: 
 
(E*P)/S 
 
Where 
  E represents proceeds from export sales  
 P represents profits made by the enterprise and  
 S represents the proceeds of all sales 
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy (indicative, if possible, the average subsidy per unit in the previous year)  
Where provision of the per unit subsidy informati on (for the year covered by the notification, for 
the previous year, or both) is not possible, a full explanation  
 
 The level of subsidies granted in 1995, 1996  and 1997 were EC$2,485,672, EC$2,800,609 and 
EC$3,120,366, respectively. 
 G/SCM/N/71/VCT 
Page 4  
 
 8. Duration of the subsidy and/or any other ti me limits attached to it, including date of 
inception/commencement  
 
 Please see "6" above. 
 
9. Statistical data permitting an assessment of the trad e effects of the subsidy. The specific nature and 
scope of such statistics is left to the judgment of the Member. To  the extent possible, relevant 
and/or determinable, however, it is desirable that such information includes statistics of 
production, consumption, imports and subsidized product(s) or sector(s)  
 
(a)  For the most three recent year s for which statistics are available; 
 
(b) for a previous representative year, which, where possible and meaningful, should be the latest 
year preceding the introduction of the subsidy or preceding the last major change in the 
subsidy. 
 
 Total value of St. Vincent's exports and imports for the three most recent years. 
   
Year Total imports (EC$) Total exports (EC$) 
1999 542,157,318 133,399,621 
2000 438,860,336 136,755,880 
2001 503,603,782 111,907,656 
 
 Please note that this is not the exports benefiting  in some way under the Fiscal Incentives Act, but 
rather, total exports.  G/SCM/N/71/VCT 
 Page 5 
 
 
  
 
LAWS OF SAINT VINCENT AND THE GRENADINES 
 
REVISED EDITION 1990 
 
CHAPTER 336 
 
FISCAL. INCENTIVES ACT 
 
Act 5 of 1982 
amended by 
*Act 20 of 1987 
*Act 16 of 1991 
 
  
Numbering of sections 
 
 Original number           Comment   Present number 
        1- 26                              _                        1- 26 
     Schedule I -                              _                                      First Schedule     Schedule II                          a 16/91   Second Schedule 
   Schedule III -                _                          Third Schedule 
 
Index of subsidiary legislation 
 
Nil 
 
 
 
Note:  The amendments made by Act 16 of 1991 did not come into effect until the 23 July 1991. G/SCM/N/71/VCT 
Page 6  
 
 CHAPTER 336 
 
FISCAL INCENTIVES ACT 
 
Arrangement of Sections 
 
 
  1. Short title. 
  2. Interpretation. 
  3. Computation of local value added.   4. Rules to determine local value added.   5. Approved product. 
  6. Declaration of approved enterprise. 
  7. Licence to import. 
  8. Record and inspection of articles. 
  9. Restriction on sale or other disposal of articles.   10. Benefits may be grante d to certain enterprises. 
  11. Benefits for enterprise engage d in highly capital intensive industry. 
  12. Exemption from income tax. 
  13. Computation of profits. 
  14. Deduction for capital and expenditure and set-off.  
  15. Loss may be carried forward for purpose of set-off.   16. Grant of export allowance. 
  17. Delay in commencement of  construction or manufacture. 
  18. Restrictions on use of factory. 
  19. Appraisal of performance of enterprise. 
  20. Dividends not subject to time limit. 
  21. Interest not to be exempt from income tax. 
  22. Transfer of status of an approved enterprise. 
  23. Effect of change of corporate name. 
  24. Pioneer/development status not to be conferred under this Act. 
  25. Regulations. 
  26. Saving. 
   First Schedule. 
   Second Schedule. 
   Third Schedule.  G/SCM/N/71/VCT 
 Page 7 
 
 
   
 
AN ACT to give effect to the Agreement on Harmonization of Fiscal Incentives to Industry. 
 
       Commencement 13 August 1982 
         S . R . O  4 6  o f  1 9 8 2  
  
1. This Act may be cited as the Fiscal Incentives Act. 
 2. In this Act, unless the context otherwise requ ires:  "approved enterprise" means an enterprise 
declared under section 6 as an approved enterprise  for the purposes of this Act; "approved product" 
means a product declared as an approved product un der section 5;  "benefit" means any relief granted 
to an approved enterprise under this Act; "Com mon Market" means the Caribbean Common Market 
established by a treaty amongst the member States se t our in the First Schedule;  "Comptroller" means 
the Comptroller of Customs and Excise;  "constructio n day" means the date specified under section 6;  
"enclave enterprise" means an en terprise producing exclusively for export to countries outside the 
Common Market;  "enterprise" means a company incorporated, or a corporate body established, under 
the Laws of Saint Vincent and the Grenadines with a view to engage in an industry;  "Group I 
Enterprise" means an enterprise in respect of which the local value added is 50 per cent or more of the 
amount realized from the sales of an approved produc t;  "Group II Enterprise" means an enterprise in 
respect of which the local value added is 25 per ce nt or more but less than 50 per cent of the amount 
realized from the sales of an ap proved product;  25 per cent or mo re but less than 50 per cent.  
"Group III Enterprise" means an enterprise in respec t of which the local value added is 10 per cent or 
more but less than 25 per cent of the amount rea lized from the sales of the approved product;  10 per 
cent or more but less than 25 per cent;  "industry" means a manufacturing or processing industry and 
includes deep sea fishing and shrimping where they form part of an integrated  processing operation 
but does not include agriculture and tourism;  "lo cal value added" means th e amount (expressed as a 
percentage of the total sales of an approved product ) by which the amount realized from the sales of 
an approved product over a continuous  period of 12 months, exceeds the aggregate amount of the 
following namely: 
 
 (a) The value of imported raw materials, content of components and parts thereof, fuel 
and services;  
 
 (b) wages, salaries or both paid during the 12-month period to persons who are not 
nationals of a member State; 
 
 (c) profits distributed or remitted directly to persons who are not resident in a member 
State; 
 
 (d) Interest management charges and other income payments, or any of them, accruing 
directly or indirectly to persons, who are not resident in a member State, other than a 
branch or agency of a bank not resident in a member State; 
 
 (e) depreciation in the imports of plant, machinery and equipment, or any of them; 
 
"member state" means any state mentioned in the Firs t Schedule;  "Minister" means the Minister who, 
for the time being is in charge of industry;  "na tional" means a person who is a citizen of a member 
state and includes a person whose connection with a member state entitles him to be regarded as 
belonging to, or being a native or resident of, the member state for the purposes of the laws for the 
time being in force relating to immigration;  "person" includes a company or other corporate body;  
"production day" means the day on  which an approved enterprise commences production of an G/SCM/N/71/VCT 
Page 8  
 
 approved product;  "sales proceeds" means the proceed s of a sale ex-factory of an approved product 
exclusive of the cost of distribution. 
 
3.(1) The local value added shall be weighed by the wages or salaries paid to  nationals of a member 
state expressed as a percentage of the total sales of  the approved product and calculated in accordance 
with the undermentioned formula: 
 
V (100 + W)
 
100 
 (2) For the purpose of subsection (1), "V" represents the local value added expressed as a percentage of the total sales  the approved product,  and "W" represents the wages and salaries paid to 
nationals of a member state and expressed as a percentage of the total sales of the approved product. 
 
4.(1) The value of the content of a component produced by a member state shall, for the purposes 
of computing the "local value added" include only the value of the imported raw material content in 
that component and not any other element in the cost of that component. 
 
(2) For the purposes of determining "local value added" under section 2, a company or other 
corporate body shall not be deemed to be resident in a member state if it is directly or indirectly 
controlled try a person who is not a resident in a member state:   Provided that a non-resident shall be deemed to be in control of a company or other corporate 
body if he owns, or is entitled to purchase, the greater part of the ordinary and paid up share 
capital (excluding shares which carry no voting rights) of the company or other corporate 
body as the case may be. 
 
5.  Cabinet may, by order in the Gazette, declare any product as an approved product for the 
manufacture by an approved enterprise. 
 
6.(1) Cabinet may, on an application made  by or on behalf of an enterprise: 
 
 (a) For the establishment of an industry  in Saint Vincent and the Grenadines to 
manufacture an approved product;  or 
 
 (b) which, on 13 August 1982, is manufacturing the product in Saint Vincent and the 
Grenadines which is declared to be an approved product under section 5 and wants to 
avail of the benefits under this Act; 
 
if it is satisfied that it is in the public interest so to do, declare the enterprise to be an approved 
enterprise with effect from such date  as may be specified in the order. 
 
(2) In determining whether an order should be made under subsection (1) Cabinet shall have due 
regard to: 
 
 (a) The number of enterprises already ma nufacturing or about to manufacture an 
approved product; 
  (b) the output, or the anticipated  output, of the enterprise;  and 
 
 (c) the viability of the enterprise. 
 
(3) An order under subsection (1):  G/SCM/N/71/VCT 
 Page 9 
 
 
  
 (a) shall specify the construction day, production day or both days; 
 
 (b) may declare in its application that it shall be restricted to a part of the factory, or to a 
particular grade, quality, description,  type or classification of its product; 
 
 (c) may impose continuing obligations on the approved enterprise; 
 
 (d) may confer certain benefits on the  approved enterprise; 
  (e) may provide for its revocation in any case  of breach of or no n-compliance with its 
requirements. 
 
(4) Every application under subsection (1) shall be submitted in writing to the Minister and shall 
contain: 
  (a) The locality, or proposed locality, of the factory in which the enterprise is 
manufacturing or intends to manu facture the approved product; 
 
 (b) the construction day, which shall not be later than 12 months after the date of the 
granting of the  application, except that where a factory is already in existence, the 
Minister may specify a special construction day and the application shall contain all the information that may enable the Mini ster to specify a construction day; 
 
 (c)  the production day, which shall not be later than eighteen months from the 
construction day except that in a case where the production of an approved product 
has already commenced the Minister may specify a special production day and the 
application shall contain all information that may be necessary to enable him to 
specify a production day;  
 
 (d) the approved product already being manufactured or intended to be manufactured; 
 
 (e) all information, supported by documentary evidence, releva nt to the  determination of 
the local value added . 
 
7.(1) The Minister may, if he is satisfied that any plant, equipment, machinery, spare parts, raw materials or components thereof are not available from member states at comparable prices and 
qualities and in adequate quantities for export, issue a lic ence to an approved enterprise to import all 
or any of them from an area outside the Common Market. 
 
(2) On receipt of a licence issued pursuant to subsection (1), an approved enterprise may import 
plant, equipment, machinery, spare parts, raw materials or components thereof free from customs duty 
from an area outside the Common Market for th e period of relief specified in section 12 or 
section 16(3) and (4), if the Comptroller is satisfied that the plant, equipment, machinery, spare parts, 
raw materials or components thereof are or were required: 
 
 (a) For constructing, altering, reconstructing or extending the approved enterprise;  or 
  (b) for equipping such an enterprise for the purpose of manufacturing an approved 
product. 
 
(3) Where, subsequent to the issue of a licence under subsection (1), there is a change in the 
circumstances contemplated by that  subsection, the Minister shall:  G/SCM/N/71/VCT 
Page 10  
 
  
 (a) Revoke the licence;  or 
 
 (b) alter the licence so as to exclude any of the articles in respect of which the change 
exists. 
 
(4) The provisions of this section shall not apply to an enclave enterprise. 
 
8.(1) An approved enterprise which: 
  (a)  Imports into Saint Vincent and the Gr enadines from an area outside the Common 
Market;  or 
 
 (b) purchases within the Common Market, an y article in respect of which it has been 
granted exemption from customs duty by virtue of section 7 (2) shall: 
  (i) Keep a record of the articles so imported or purchased in such form, and 
containing such particulars, as may be required by the Comptroller. 
 
  (ii) cause the article to be marked with such mark, and in such manner, as may be 
required by the Comptroller;  and 
   (iii) permit the Comptroller or any pers on authorized by him, at all reasonable 
times, to inspect such record and to ha ve access to any factory or warehouse 
under its control for the purpose of ex amining any such article which the 
Comptroller has reason to believe to be  therein and satisfying himself of the 
accuracy of the particulars contained in the record. 
 
(2) An approved enterprise which contravenes any of the provisions of this section is guilty of an 
offence and liable to a fine  of four thousand dollars. 
 
9.(1) An article purchased by an approved enterpri se free of customs duty under the provisions of 
section 7(2) shall not be sold, given or otherwise disposed of by such enterprise except: 
 
 (a) To the transferee, in case of a transfer of the ownership of a factory belonging to the 
enterprise; 
 
 (b) where the approved enterprise pays or gives security au the satisfaction of the 
Comptroller for the payment of an amount of customs duty which, but for the 
provisions of section 7(2), would have been payable on importation of such article 
into Saint Vincent and the Grenadines;  or 
 
 (c) after the expiration of five years from the date of the purchase of the article. 
 
(2) An approved enterprise which contravenes any of the provisions of subsection (1), is guilty of 
an offence and liable to a fine of an amount not exceeding three times the value of the article the 
disposal of which contravenes such provisions. 
 10.(1) An approved enterprise may be granted a benefit under this Act only if it is classified under one of the following: 
  G/SCM/N/71/VCT 
 Page 11 
 
 
  (a) Group I Enterprise 
  Group II Enterprise 
  Group BI Enterprise; 
 
 (b) Enclave Enterprise. 
 
(2) Before the classification of an approved enterprise as Group I, Group II or Group III 
Enterprise, the local value added as computed in  accordance with section 3 shall be estimated. 
 
(3) For the purpose of this section cabinet may pass an order classifying any  enterprise.  11.(1) Where an approved enterprise is engaged in a highly capital intensive industry, Cabinet may, 
by order in the Gazette, grant it any benefit for a period not exceeding that for which a benefit may be 
granted to an enclave enterprise in accordance with the Third Schedule. 
 
(2) In this section "highly capital intensive industr y" means an industry the capital investment in 
which is not less than twenty five million dolla rs, East Caribbean currency or its equivalent. 
 
12.(1) Notwithstanding anything contained in the law relating to income tax for the time being in 
force, Cabinet may, in its discretion and subject to  such conditions as it may deem fit to impose, grant 
to an enterprise complete or partial exemption from income tax as from the production day for a 
period specified in the Third Schedule (hereinafter referred to as "tax holiday period"):  
 Provided that it shall be the duty of every such enterprise to submit an annual return of 
income as required by the law relating to income tax. 
 
(2) Where the expiration of the tax holiday period does not coincide with the end of the 
accounting period of an approved enterprise, th e income for the accounting period during which the 
last day of the tax period falls shall be apportioned between the pa rts of the accounting periods, and 
the income thus apportioned to the part of the accounting period shall be exempt from income tax. 
 
13. In computing the profits of an approved enterprise for the purpose of exemption from income 
tax under section 12(1), allowance shall be made for any depreciation in value resulting from any 
wear and tear which would, but for the exemption, be claimable in that year. 
 
14.(1) The provisions of the law relating to income tax for the time being in force shall apply to an 
approved enterprise, from the first day following the day on which the tax holiday ends, except that a 
deduction as an initial allowance for capital expenditure shall only be in respect of expenditure 
incurred after the expiration of the pe riod of exemption from income tax, 
 
(2) Any loss incurred by an approved enterprise during the tax holiday period may be set-off in 
accordance with the provisions of section 15(1). 
 
15.(1) Notwithstanding the provisions contained in th e Income Tax Act, on the expiration of the tax 
holiday under that Act, the net losses incurred  during the period may be carried forward for the 
purposes of set-off in computing the profits taxable under the said Act for the approved enterprise for 
the five-year period following the tax holiday period. 
 (2) Where an order declaring an enterprise as an approved enterprise under this Act is thereafter 
revoked, the enterprise shall, for the purpose of carrying forward net losses incurred prior to the 
revocation of the order, be deemed to be an approved enterprise. 
 G/SCM/N/71/VCT 
Page 12  
 
 (3) For the purpose of this section "net losses" in  relation to an approved enterprise means the 
excess of all losses over all profits made during the tax holiday period during which it was an 
approved enterprise. 
 
16.(1) Where an enterprise has made sales by way of export to a territory other than a territory listed 
in the Second Schedule, in computing the tax chargeable for any year on the income of that enterprise 
there shall be set off an export allowance calculated in the manner specified in Part 2 of that Schedule 
if the enterprise makes a claim in that behalf and satisfies the Comptroller of Inland Revenue that the 
provisions of this section and of the Second Schedule are applicable to it. 
 (2) All exports of approved products of an industry, and any other product that Cabinet may, by order in the Gazette specify, shall be eligible for export allowance: 
 
 Provided that, where the exports are to Guyana, Jamaica or  Trinidad and Tobago, such 
allowance shall be confined to a period not exceeding five years next following the expiration 
of the tax holiday period re ferred to in section 12. 
 
(3) During the period of five years after 13 Augus t 1982 an enterprise may claim relief under this 
section in respect of the exportation to Guyana, Jamaica or Trinidad and Tobago even if the enterprise 
is not eligible to the benefit envisaged in section 7 or section 12 or both. 
 (4) An export allowance under subsection (2) shall be made to an enterprise manufacturing or producing the products of an industry specified under that subsection and in no case shall an 
allowance be made more than once in respect of any one product. 
 
17.(1) Where an approved enterprise fails or neglects: 
 
 (a) To commence the construction of a factor y on or before the construction day;  or 
 
 (b) to commence manufacture of an appr oved product to the factory in marketable 
quantities on or before the production day, 
 
 the Minister may issue a notice in writing requirin g it, within 30 days of the date of the notice, 
either: 
 
 (i) to commence construction of the factory or the manufacture of the approved product 
in marketable quantities, as the case may be;  or 
 
 (ii) to prove to the satisfaction of the Minister  that the failure or neglect is attributable to 
a cause beyond its control and that there is a reasonable prospect of its commencing 
construction of the factory or the manufacture of the approved product in marketable 
quantities, as the case may be, within such ti me as the authority ma y, having regard to 
circumstances of the case, consider reasonable. 
 
(2) Where an approved enterprise satisfies the au thority as required by subsection (1)(ii), Cabinet 
shall, 'by order in the Gazette, substitute for the co nstruction day or the production day, as the case 
may be, some other specified day, and thereupon the prov isions of this Act shall take effect as if the 
specified day was substituted in the order ma de in relation thereto under section 6. 
 (3) Cabinet may, having regard to all the circumst ances of the case if it thinks it expedient so to 
do, by order in the Gazette, revoke the order made under section 6 if an approved enterprise: 
 
 (a)  Contravenes any of the provisions of this Act or of the regulations made hereunder; or  G/SCM/N/71/VCT 
 Page 13 
 
 
  
 (b) fails to comply with the requirements of a notice issued under section 17(1). 
 
(4) Save as provided in section 15(2), where an order made, under section 6 has been revoked 
under this section the provisions of sections 7 and 12 shall be deemed never to have applied to the 
enterprise and such enterprises shall, notwithstanding anything contained in the law for the time being 
in force relating to customs or income tax, pay to the Comptroller and to the Comptroller of Inland 
Revenue any sum which, but for the provisions of section 7(2) and 12, would have been payable. 
 
(5) Cabinet may, notwithstanding the provisions concerned in subsection (4), remit the whole part or part of any customs duty or income tax th at may become payable by reason of the order having 
been revoked if it is satisfied that it would otherwis e cause undue hardship or that there are other valid 
grounds for granting remission. 
 
(6) All sums that become payable by reason of any action taken under this section may be 
recovered summarily as if it were a civil debt.  
18.(1) Any factory belonging to an enterprise which is being used, or is intended to be used, for the 
manufacture of an approved product shall not, wi thin ten years of the publication of the order 
declaring it to be an approved enterprise, be used without previous approval of Cabinet for any 
purpose other than manufacture of an approved product.  (2) Any enterprise which contravenes the provisions  of sub-section (1) is guilty of an offence and 
liable to a fine of eight thousand dollars and in the case of a continuing offence to a further fine of 
four thousand dollars in respect of each day dur ing which the offence continues after conviction 
thereof. 
 
(3) The provisions of subsections (1) and (2) sha ll not apply to an enterprise which has ceased to 
be an approved enterprise and in respect of whic h all sums payable to the Comptroller of Inland 
Revenue under the provisions of section 7(2) and section 12 have been paid . 
 
19.(1) The Minister shall, at the expiration of two years from the production day, and thereafter at 
intervals of one year until cessation of all benef its under this Act, appraise the performance of an 
approved enterprise for the purpose of determining whether any change in classification is necessary. 
 
(2) Where, on appraisal under subsection (1), an approved enterprise:  
 (a) Fails to maintain its classification or cannot be reclassified to any of the other groups 
listed in the Third Schedule, that enterprise  shall, with effect from the date of the 
notice of the decision of the Minister under subsection (5), be no longer treated as an 
approved enterprise for the purposes of section 7(2) or of section 12. 
 
 (b) maintains its classification or is reclassi fied to any of the other groups listed in the 
Third Schedule, that enterprise shall cont inue as an approved enterprise and the 
provisions of subsection (1) shall continue to apply. 
 
(3) Where, as a result of the reclassification of an approved enterprise to a lower group, the tax 
holiday period exceeds the maximum period allowable in that lower group Cabinet shall, by order in the Gazette, reduce the period so as to coincide with the maximum period allowable in the lower group to which the approved enterprise has been reclassified. 
 
(4) Where an approved enterprise is reclassified to a higher group, Cabinet may, by order in the 
Gazette, increase the tax holiday period so as to coincide with the maximum period allowable. G/SCM/N/71/VCT 
Page 14  
 
  
 
 
FIRST SCHEDULE  
Section 2 
 
MEMBER STATES 
 
 Antigua  
 Barbados   Belize   Dominica  
 Grenada  
 Guyana  
 Jamaica  
 Montserrat   Saint Kitts/Nevis  
 Saint Lucia  
 Saint Vincent and the Grenadines  
 Trinidad and Tobago  
 Any other state of the Caribbean region that becomes a member of the Common Market.  
_______________ 
  
SECOND SCHEDULE  
Section 16 
 
PART 2 
 
EXPORTS TO THE FOLLOWING TERRITORIES ARE NOT ELIGIBLE FOR 
EXPORT ALLOWANCE  
 
 Antigua 
 Barbados 
 Belize  Dominica 
 Grenada 
 Montserrat 
 Saint Kitts/Nevis 
 Saint Lucia  G/SCM/N/71/VCT 
 Page 15 
 
 
 PART 2 
 
METHODS OF CALCULATING EXPORT ALLOWANCE  
 
1. An export allowance set off for the purpose of  section 16 shall be calculated as follows: 
 
Export profits as a percentage 
of total profits Rebate of income tax as a 
percentage of income tax 
on export profits 
10 but under 21  25% 
21 but under 41 35% 
41 but under 61  25% 
61 and over  50% 
 
2. For the purposes of calculation:  
 (a) Export profits as a percentage of total pr ofits shall be deemed to be export sales as a 
percentage of total sales; 
 
 (b) profit attributable to exports shall be  taken to be the amou nt resulting from the 
formula  P x E
 
        S  
 
 Where: 
 
 (i) "P' represents the chargeable profit of  an enterprise for its year of income; 
  (ii) 'E" represents the proceeds of export sale s (ex-factory) of the output of an enterprise 
during its year of income; 
 
 (iii) "S" represents the proceeds of all sale s (ex-factory) of the output of an enterprise 
during its year of income. 
 
3. In computing the proceeds of all sales for the year of income, there shall be deducted any 
excise duty paid on goods sold during the year. 
 
THIRD SCHEDULE  
 
Section 19 
 
TAX HOLIDAY PERIOD 
  Classification of approved
 Tax holiday period  
 enterprises  
 Group  Years  
 Group I Enterprise 15 
 Group 11 Enterprise 12 
 Group III Enterprise 10  Enclave Enterprise 15  
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