WORLD TRADE  
ORGANIZATION  S/WPGR/W/25/Add.4 
12 February 2004 
 
 (04-0564) 
Working Party on GATS Rules   
  
 
 
SUBSIDIES FOR SERVICES SECTORS 
 
INFORMATION CONTAINED IN WTO TRADE POLICY REVIEWS 
 
Background Note by the Secretariat
1 
 
Addendum  
 
 I. INTRODUCTION 
1. At its meeting of 1 October 2003, the Working Party on GATS Rules requested the 
Secretariat to prepare an update of the information on subsidies in services contained in Trade Policy Reviews.  This document, which complements the information provided in S/WPGR/W/25, - Add. 1, 
Add. 2 and Add. 3, covers 26 Reviews carried out between August 2002 and 11 February 2004 
(WT/TPR/S/103 to 128).  Relevant information has been added, in italics, in the overview table 
already contained in the previous documents (Table 1).   
2. The compilation of information from TPR reports necessarily suffers from certain limitations, 
as explained at length in the introduction to previous versions of this Note
2.  The same considerations 
continue to apply.  Suffice it to recall, for instance,  that the selection of Members to be reviewed, or 
the content of reports, are not driven by subsidy-re lated issues and problems, but rather by a Member's 
main policy challenges and constraints.  As a resu lt, the amount of information contained on subsidies 
in reports might vary from Member to Member.  Also, TPR reports do not normally attempt to assess 
the possible distortive effects of subsidies on trade.  While most reports contain some information on subsidies, the limited level of detail sometimes ma kes it difficult to identify the extent to which a 
benefit is actually being conferred or the id entity of the recipient of the subsidy.   
3. It also needs to be kept in mind that, while th is Note compiles potentially relevant information 
against the background of the definition of "subsidy" and related concepts (e.g., "benefit", "financial 
contribution") contained in the Agreement on S ubsidies and Countervailing Measures (ASCM), not 
all data recorded in TPR reports may be compatible w ith this definition.  As previous versions of this 
Note, the compilation of information from TPR reports focuses, in the light of Article 2 of the ASCM, 
on specific subsidies.  As well, some of the subs idies mentioned in TPR reports may be financial 
contributions to services which are beyond the scope  of the GATS, i.e., services provided in the 
exercise of governmental authority (Article I:3(b)) or services excluded through the Annex on Air Transport Services.   
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  
2 See introductions to: S/WPGR/W/25, S/WPGR/W/25/Add.1, S/WPGR/W/25/Add.2, and 
S/WPGR/W/25/Add.3. S/WPGR/W/25/Add.4 
Page 2  
 
 II. POLICY PATTERNS 
4. The information contained in the TPR reports issued since September 2002 generally tends to 
confirm the broad patterns identified in previous documents.  Subsidies are found in the whole range 
of services sectors, but mainly in tourism, transport and banking.  A good number of Members also provide subsidies relating to telecommunications services, many of which in the form of grants 
relating to the fulfilment of universal service obligations.  Concerning the types of measures used, 
Members continued to rely on tax incentives more than on direct grants.  A significant number of Members used duty-free inputs and free zone incentiv es, which sometimes appeared to be linked to 
exports.   
 
Table 1: Forms of financial assistance to services sectors - information from TPR Reports 
 
¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Tourism Botswana 
Canada 
Israel 
Switzerland Liechtenstein 
Costa Rica 
Czech Rep. Slovak Rep. 
Australia 
Lesotho Morocco Turkey Canada 
Nigeria
1 
Iceland 
India Jamaica 
South Africa 
Trinidad &      Tobago 
Turkey 
Grenada Mauritius Slovak Rep. 
Barbados 
Uganda Botswana 
Morocco 
 South 
Africa 
Burundi Nigeria
1 
Argentina 
Egypt 
India Israel 
Jamaica 
Nicaragua Philippines 
Solomon Is. 
Tanzania Trinidad &      Tobago 
Uruguay 
Madagascar Ghana 
Macau, China 
Costa Rica Dominica 
Grenada 
St. Kitt & Nevis Saint Lucia 
St. Vincent & G. 
Gabon Cameroon 
Mauritius 
Slovak Rep. Malawi 
Haiti 
Barbados Australia Dominican 
Republic 
Zambia Venezuela 
Lesotho 
Morocco Niger 
Senegal 
Honduras Guyana 
Thailand 
Turkey Sri Lanka Argentina 
Egypt 
India 
Jamaica Kenya 
Nicaragua 
Peru Solomon Is. 
Tanzania 
Trinidad &      Tobago Turkey 
Uruguay 
Mozambique Ghana 
Macau, China 
Dominica Grenada 
S. Kitt & Nevis 
Saint Lucia St. Vincent & G. 
Malawi 
Haiti Barbados 
Burundi 
Morocco  Niger 
Senegal 
Honduras Bulgaria Guyana Guinea
1 
Lesotho 
Singapore 
Brunei D. Mauritius 
Guatemala 
Slovenia Barbados 
New Zealand 
Indonesia The Gambia   
 
 
63  S/WPGR/W/25/Add.4 
 Page 3 
 
 
 ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Transportation 
general or 
unspecified Canada 
Switzerland Liechtenstein 
Czech Rep. 
Australia Namibia  
South Africa 
New Zealand  Poland 
Grenada  Philippines 
Poland Korea RP 
Madagascar 
Slovak Rep. Malawi 
Australia 
Morocco Sri Lanka 
 Mozambique 
Malawi Venezuela 
Morocco 
The Gambia Brunei D. 
Czech Rep. Slovak Rep.  
Indonesia 
Bulgaria The Gambia 
Sri Lanka  
 
24 
Maritime transport 
 Australia 
Solomon Islands1 
Czech Rep. Pakistan 
India 
Turkey  Thailand 
U.S. 
India  Egypt 
India 
Jamaica Peru 
Singapore 
Turkey U.S. 
Brazil 
Japan Mauritius 
Mexico 
Barbados Australia Venezuela 
HK, China 
Indonesia Honduras 
Turkey 
U.S. Sri Lanka 
 Egypt 
Jamaica 
Papua N.G. Peru 
Turkey 
Pakistan Barbados 
Indonesia 
Honduras EC 
Korea RP 
U.S.  Mauritius 
India 
Australia   
 
 
25 
Air transport 
 Canada 
U.S.  
 Papua N. G. Hungary1 Egypt 
Macau, China  
Mexico Venezuela 
HK, China 
Niger Honduras 
 Hungary 
Papua N.G. 
Niger Honduras EC (F, I, P, 
G) 
India EC  
New Zealand 
U.S.   
14 
 
Rail transport India 
Kenya 
Switzerland Czech Rep. 
South Africa 
Turkey    Australia 
Hong Kong, 
China Senegal  Slovak Rep.
1 
Malawi 
India EC 
Indonesia 
Senegal   
 
13 
Banking Poland 
Brazil 
Australia 
South Africa   Indonesia 
Thailand 
Poland 
EC (D) Costa Rica Slovak Rep. 
 HK, China 
Thailand 
Norway 
Slovak Rep. Mexico 
India
1 
Indonesia 
Thailand 
Turkey 
 Singapore 
Tanzania 
U.S. 
Poland Korea RP Switzerland 
Ghana  
Macau, China Mauritius 
Malaysia 
India Barbados 
Australia 
 Trinidad & 
     Tobago
1 
Jamaica 
Singapore Tanzania Thailand 
Mozambique 
Saint Lucia St. Vincent & G. 
Morocco 
The Gambia Korea RP 
Brunei D. 
Czech Rep. 
Slovak Rep. India  Barbados  
 
33 S/WPGR/W/25/Add.4 
Page 4  
 
 ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Other financial 
services Australia 
  Indonesia  
Thailand U.S.  
 HK, China 
Thailand Singapore 
U.S. Korea RP 
Brazil 
Dominica St. Kitt & Nevis 
Barbados 
Australia  U.S.  Singapore 
Thailand  Trinidad & 
     Tobago
1 
Mozambique 
Saint Lucia 
St. Vicent & G. 
Barbados Morocco 
The Gambia 
   
 
17 
Software, info technology, communications, 
info processing Canada 
Australia Turkey Jamaica  Canada 
Egypt India 
Korea RP 
Grenada  Slovak Rep. 
Pakistan 
Australia Sri Lanka Jamaica 
Trinidad &      Tobago
1 
Uruguay 
Madagascar Grenada 
Pakistan 
India The Gambia 
 Korea RP 
Pakistan  
  
15 
Construction U.S. 
Australia 
Chile Argentina  
Poland  Argentina  
Bolivia 
Trinidad &      Tobago 
Turkey 
Korea RP Poland India  
Australia 
Venezuela Niger 
Sri Lanka 
 Mozambique 
Brunei D. 
India Niger   
 
15 
Recreation, culture & sports Canada 
Korea RP Norway 
Australia Jamaica  Bolivia 
Costa Rica Australia 
Niger 
Senegal Honduras 
Sri Lanka 
 Bolivia 
Israel Niger 
Senegal 
Honduras   
12 
Telecom Peru 
Singapore Australia 
Venezuela 
El Salvador Canada 
Botswana 
Namibia Chile U.S.  
 India  India 
St. Kitt & Nevis
1 
Venezuela Trinidad & 
     Tobago1 
Mozambique 
Saint Lucia 
India The Gambia Mauritius 
India Niger 
The Gambia 
  
 
18 
Audiovisual 
services 
 Argentina 
Canada 
EC Australia 
New Zealand 
The Gambia    Canada 
Jamaica 
Tanzania Korea RP 
Mexico Jamaica 
Tanzania 
Burundi   
11 
 
Wholesale & retail trade, distribution Australia Turkey  Trinidad &  
    Tobago 
Korea RP 
Australia Venezuela 
Honduras 
Sri Lanka  Tanzania 
El Salvador 
Honduras 
Bulgaria The Gambia 
Sri Lanka   
11  S/WPGR/W/25/Add.4 
 Page 5 
 
 
 ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Real estate Australia India 
  Canada 
Japan Australia 
 Trinidad &  
    Tobago   
5 
Energy Australia 
Turkey   Madagascar 
Costa Rica 
Slovak Rep. Guatemala 
Haiti 
Australia Sri Lanka The Gambia Brunei D. 
Guatemala 
India El Salvador 
Bulgaria  
U.S.  The Gambia 
  
 
14 
Other & 
unspecified sectors Australia 
New Zealand 
Morocco Turkey 
 
 Australia 
Bangladesh 
Turkey Czech Rep. 
Uganda Canada Singapore 
Korea RP 
Costa Rica Dominica 
St. Kitt & Nevis 
Australia Venezuela 
Morocco 
Senegal Honduras 
Thailand 
 Hungary 
Singapore 
Dominica Saint Lucia 
St. Vincent & G. 
Mauritania Dominican 
Republic 
Burundi Senegal 
Honduras 
Thailand The Gambia  Brunei D. 
Czech Rep. 
Mauritius Slovak Rep. 
El Salvador 
The Gambia  
 
28 
Number of cases 74 44 15 165 112 60  
 
1 Subsidy programme envisaged. 
2 Counting EC as one.  
Source : WTO Secretariat. S/WPGR/W/25/Add.4 
Page 6  
 
 ANNEX 
 
Content of Individual Trade Policy Reviews
 
  Mauritania -- WT/TPR/S/103  
 
P. 49, para. 86
 
  In 2002, the new Investment Code introduced a free points regime applicable to enterprises 
whose total production is exported.
3  The enterprises covered by this  regime are under the supervision 
of the customs administration and benefit from a dvantages such as exemption from export duties and 
taxes, exemption from import duties and taxes on  production means and inputs, simplified customs 
formalities and controls, and freedom to recruit up to four expatriate agents without authorization or a 
work permit.  These enterprises pay a flat rate of 25 per cent on profits and the minimum flat rate tax 
(IMF) of 2 per cent on turnover, which constitutes advance payment of the profits tax. 
 
Australia – WT/TPR/S/104     
 
P. xiii, para. 25  
 
 In the period under review, Government support to the services sector, through direct 
financial assistance, tax expenditures, and funding to  public-sector institutions, has risen;  the main 
recipients have been finance and insurance, cultural and recreational, transport and storage, 
property, and business and communication services .  Several access restrictions have remained in 
force.  Financial services reforms (e.g. prudential rules, institutional) have been pursued in several 
areas in the light of recommendations made in 1997.  Liberalization of telecommunications has led to 
further privatization of state-owned firms, increa sed entry of private sector operators, and lower 
tariffs;  however, operational costs relating to the un iversal service obligation have been a concern.  
Support for domestic advertisement and film producers has been maintained through local-content 
requirements in television broadcasting as well as film production  funding.  As regards maritime 
services, state involvement seems to have  been reduced;  financial assistance to shippers of freight  
between Tasmania and the main land has been maintained.  Maritime road, and rail transport  have 
also benefited from tax rebates on fuels.  Efforts ha ve been made to reduce air transportation costs and 
improve the quality of services through more operators and airport leasing.  E-commerce is being promoted through network fundi ng and bilateral arrangements. 
P. 60-61, para. 96  
 
 
 Despite public spending cuts as part of the fiscal consolidation programme (Chapter I), 
between 1997/98 and 2000/01, different forms of dir ect financial, tax or institutional assistance to 
exports of goods and services  followed an overall upward trend, largely due to increased support for 
exports of primary and mining products as well as certain services (Table III.6).  By contrast, 
assistance to exports of manufactured goods declined. 
                                                      
3 According to Article 8 of the Code the following may be covered by the free points regime:  activities 
directly intended for export (the production and sale of goods abroad or the supply of services ), activities 
indirectly intended for export comprising the integral sale of goods or supply of services  to beneficiaries 
situated in Mauritania whose ac tivities directly involve export.  S/WPGR/W/25/Add.4 
 Page 7 
 
 
 Table III.6 
Commonwealth assistance to exporters of goods and services, 1997-02 
($A million) 
 1997/98 1998/99 1999/00 2000/01a 2001/02a 
General export measures 549 543 546 579 605 
of which:      
(i)  primary products (DFA, FI) 55 53 58 63 69 
(ii) manufacturing sector 229 208 201 212 32 
- food, beverages and t obacco (DFA) 7 8 8 9 9 
- textiles, clothing, footwear a nd leather (DFA, FI, TE) 19 16 15 17 17 
- wood and paper products (DFA, TE) 4 3 3 <3 <3 
- printing, publishing and recorded media (DFA) 3 3 3 3 3 
- petroleum, coal, chemical and associ ated products (DFA, FI, TE) 9 10 10 11 11 
- non-metallic mineral products (DFA, TE) 3 2 2 <2 <2 
- metal product manufacturing (DFA, TE) 10 8 9 6 6 
- motor vehicles and parts (FI, DFA, TE) 4 18 19 70 70 
- other transport equipment n.a. n.a. n.a. n.a. .. 
- other machinery and equipment (DFA, TE) 61 32 31 20 20 
- other manufacturing (DFA, TE) 17 13 14 21 21 
- unallocated manufacturing (DFA, TE) 92 95 87 50 70 
(iii) services sector 247 266 266 290 288 
- electricity, gas, and water supply (DFA) <1 <1 <1 <1 <1 
- construction (DFA, FI, TE) 22 24 27 30 30 
- wholesale trade (DFA, TE) 15 15 12 17 17 
- retail trade (DFA, FI) 22 25 24 23 23 
- accommodation, cafés and restaurants (DFA, FI) 28 32 33 37 37 
- transport and storage (DFA, FI, TE) 48 52 49 48 48 
- communication (DFA, FI) 19 20 22 25 23 
- finance and insurance (DFA) <1 <1 <1 <1 <1 
- property and business services (DFA) 22 23 22 24 24 
- government administration and defence (FI) 2 2 2 3 3 
- education (DFA, FI) 20 20 18 20 20 
- health and community services (DFA) <1 <1 <1 <1 <1 
- cultural and recreational services (DFA, FI) 25 28 29 33 33 
- personal and other services (DFA) 1 1 1 1 1 
 - unallocated services (FI) 20 21 24 26 26 
(iv) mining sector (DFA, FI) 8 9 10 11 11 
(v)  unallocated otherb (FI) 10 7 11 3 5 
.. Not available. 
n.a. Not applicable 
a Estimates. 
b Includes programmes or amounts of funding where the industry is not stated or recipients are unknown. 
Note: DFA:  direct financial assistant;  FI: funding to institu tions;  TE: tax expenditures.  To  calculate the total, data give n as 
"<A$1 million" " have been read as $A 1 million. 
Source:  Productivity Commission (2001 ), Trade & Assistance Review 2000-01, Tables 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 
[Online], 12 December, Annual Report Series 1999-2000, AusInfo.  Available at: 
http://www.pc.gov.au/resear ch/annrpt/[11 June 2002]. 
 S/WPGR/W/25/Add.4 
Page 8  
 
 P. 109-113, para. 77
 
  The estimated level of support provided to the services sector through direct financial 
assistance, tax expenditures, and funding to public-sector institutions has been increasing 
(Table IV.5);  budgetary outlays aimed at encouraging investment, R&D, and exports have been 
allocated mainly to finance and insurance, cultural and recreational, transport and storage, 
property, and business and communication services . 
Table IV.5 
Developments in domestic support to services, 1997-02 
($A million) 
 Typea 1997/98 1998/99 1999/00 2000/01b 2001/02b 
Electricity, gas & water supply       
Industry-specific measures       
Renewable Energy Commercialization c DFA - 2 3 7 12 
Renewable Energy Equity Fund c DFA - - <1 3 3 
General investment measures       
Development allowance TE 14 2 2 4 4 
Infrastructure Bonds TE 60 55 44 31 13 
Infrastructure borrowing tax offset scheme TE 3 25 25 43 43 
General export measures       
Export Market Development Grants Scheme DFA <1 <1 <1 <1 <1 
General R&D measures       
Cooperative Research Centres FI 3 4 5 5 3 
R&D Start and related programmes DFA 1 1 1 2 2 
R&D tax concession TE 1 1 1 1 1 
Total  83 91 81 97 82 
Construction       
General export measures       
Austrade export promotion d FI 20 22 25 27 27 
Export Market Development Grants Scheme DFA 2 2 2 2 2 
TRADEX TE - - - 1 1 
General R&D measures       
Cooperative Research Centres FI - - - - 2 
CSIRO research FI 24 25 25 22 22 
Innovation Investment Fund DFA - - - 2 3 
R&D Start and related programmes DFA 2 <1 <1 1 1 
R&D tax concession TE 19 15 8 8 8 
Total  67 64 60 63 65 
Wholesale trade       
General investment measures       
Development allowance  <1 - - 12 11 
General export measures       
Export Market Development Grants Scheme DFA 15 15 12 13 13 
TRADEX TE - - - 4 4 
General R&D measures       
R&D Start and related programmes DFA - <1 2 1 1 
R&D tax concession TE 14 13 20 21 22 
Total  30 28 35 51 51  S/WPGR/W/25/Add.4 
 Page 9 
 
 
  Typea 1997/98 1998/99 1999/00 2000/01b 2001/02b 
Retail trade       
Industry-specific programmes       
Pharmacy Restructuring grants DFA 7 11 13 10 - 
General investment measures       
Development allowance TE <1 <1 <1 <1 <1 
General export measures       
Australian Tourist Commission FI 18 21 21 21 21 
Export Market Development Grants Scheme DFA 4 4 3 2 2 
General R&D measures       
R&D tax concession TE 2 3 5 5 5 
Total  32 38 41 39 29 
Accommodation, cafes & restaurants       
General investment measures       
Development allowance TE 1 1 1 - - 
General export measures       
Export Market Development Grants Scheme DFA 4 5 5 9 9 
Australian Tourist Commission FI 24 27 28 28 28 
Total  29 33 34 37 37 
Finance & insurance       
General investment measures       
Development allowance TE 27 6 6 1 1 
Offshore Banking Unit TE 17 30 35 35 30 
Infrastructure borrowing tax offset scheme TE 3 19 19 19 19 
General export measures       
Export Market Development Grants Scheme DFA <1 <1 <1 <1 <1 
General R&D measures       
R&D Start programme DFA 1 <1 <1 1 1 
Innovation Investment Fund DFA - 5 5 <1 <1 
R&D tax concession TE 54 26 18 19 20 
Total  102 86 83 76 71 
Communication services       
Industry-specific measures       
Investment incentive to IBM DFA - - - 2 1 
Software Engineering Centres FI - 2 6 6 6 
General investment measures       
Development allowance TE - 18 - 33 30 
General export measures       
Export Market Development Grants Scheme DFA 1 1 1 2 2 
Austrade export promotion d FI 17 18 20 22 22 
Australian Tourist Commission FI 1 1 1 1 1 
General R&D measures       
Cooperative Research Centres FI 2 2 2 3 6 
CSIRO research FI 22 21 21 21 21 
Innovation Investment Fund DFA - 12 20 5 6 
R&D Start programme DFA 7 10 12 14 14 
R&D tax concession TE 16 7 30 31 32 
Total  66 93 114 140 141 S/WPGR/W/25/Add.4 
Page 10  
 
  Typea 1997/98 1998/99 1999/00 2000/01b 2001/02b 
Transport & storage       
Industry-specific measures       
Investment incentive to Asia Pacific Space Centre DFA - - - - 6 
General investment measures       
Development allowance TE 33 <1 <1 6 5 
Infrastructure Bonds TE 55 50 41 29 12 
Infrastructure borrowing tax offset scheme TE 4 31 31 13 13 
General export measures       
Export Market Development Grants Scheme DFA 18 18 15 11 11 
Australian Tourist Commission FI 30 34 34 35 35 
TRADEX TE - - - 2 2 
General R&D measures       
R&D Start and related programmes DFA - 1 5 2 2 
R&D tax concession TE 4 12 5 5 6 
Total  144 147 132 102 91 
Property & business services       
General investment measures       
Development allowance TE 1 - 18 2 2 
General export measures       
Export Market Development Grants Scheme DFA 22 23 22 24 24 
General R&D measures       
Biotechnology Innovation Fund DFA - - - - 1 
Cooperative Research Centres FI 7 4 3 4 5 
R&D Start & related programmes DFA 6 14 22 28 28 
Innovation Investment Fund DFA - 1 1 <1 <1 
R&D tax concession TE 40 48 65 68 70 
Total  76 89 131 126 129 
Government administration & defence       
General investment measures       
Development allowance TE - 3 3 - - 
General export measures       
Austrade export promotion d FI 2 2 2 3 3 
General R&D measures       
R&D Start & related programmes DFA <1 <1 <1 <1 <1 
Total  2 6 6 3 3 
Education       
General investment measures       
Development allowance TE - 1 1 <1 <1 
General export measures       
Australian Tourist Commission FI <1 1 1 1 1 
Export Market Development Grants Scheme DFA 11 11 8 9 9 
Austrade export promotion d FI 8 8 9 10 10 
General R&D measures       
R&D Start & related programmes DFA 5 5 7 4 4 
R&D tax concession TE 2 1 3 3 3 
Total  27 26 29 27 27  S/WPGR/W/25/Add.4 
 Page 11 
 
 
  Typea 1997/98 1998/99 1999/00 2000/01b 2001/02b 
Health & community services       
General export measures       
Export Market Development Grants Scheme DFA <1 <1 <1 <1 <1 
General R&D measures       
Cooperative Research Centres FI 12 12 13 13 13 
R&D Start programme DFA 7 10 12 18 18 
R&D tax concession TE 2 3 3 3 3 
Total  22 25 29 35 38 
Cultural & recreational services       
Industry-specific measures       
Australian Film Commissionb DFA 30 16 17 17 17 
Australian Film Finance Corporation & Film Australiab DFA 48 48 48 48 48 
Film industry division 10B & 10BA TE 20 21 21 21 19 
General export measures       
Australian Tourist Commission FI 3 4 4 4 4 
Austrade export promotiond FI 16 17 19 21 21 
Export Market Development Grants Scheme DFA 6 7 6 8 8 
General R&D measures       
Biotechnology Innovation Fund DFA - - - - 1 
Cooperative Research Centres FI 5 2 2 2 2 
R&D Start & related programmes DFA - <1 <1 <1 <1 
R&D tax concession TE 1 - 4 4 4 
Total  129 115 122 127 126 
Personal & other services       
General export measures       
Export Market Development Grants Scheme DFA 1 1 1 1 1 
General R&D measures       
R&D Start & related programmes DFA 2 2 2 4 4 
R&D tax concession TE <1 <1 <1 <1 <1 
Total  3 4 4 6 6 
Unallocated services       
General export measures       
Austrade export promotiond FI 19 20 23 25 25 
Australian Tourist Commission FI 1 1 1 1 1 
General R&D measures       
CSIRO research FI 9 9 9 10 10 
R&D Start & related programmes DFA - <1 2 <1 <1 
Other programmes       
Building IT Strengths DFA - - 42 6 55 
Total  29 31 75 42 91 
Total outlays  445 484 563 544 605 
Total tax expenditures  395 391 409 426 383 
Total budgetary assistance  840 875 973 970 988 
- Nil. 
a DFA:  direct financial assistance;  FI:  f unding to institutions;  TE:  tax expenditures. 
b 2000-01 data are Budget estimates and 2001-02 data are Budget appropriations. 
c The above industry allocations reflect the av ailability of recently supplied data.  In the Trade & Assistance Review 1999-2000,  
these programmes were classified under the unallocated category due  to a lack of information.  Consequently, the previous 
classification is no  longer appropriate. S/WPGR/W/25/Add.4 
Page 12  
 
 d Estimates for 1999/00, 2000/01, and 2001/02 are based on Austra de industry allocations for 1998/99.  Austrade has not 
assembled data on the industries be nefiting from its export promotion activities for subsequent years. 
Note: Figures may not add to total due to rounding. 
Source:  Productivity Commission (2001), Trade & Assistance Review 2000-2001, Table 4.6  [Online], 11 December, 
Annual Report Series 2000-2001, AusInfo.  Availabl e at:  http://www.pc.gov.au [28 February 2002]. 
  
P. 119, para. 98  
 
 During the period under review, the universal ser vice obligation (USO) subsidy levels have 
been an issue and the subject of comprehensive reform.  Telstra's USO requires that standard 
telephone services, including services for the di sabled, public payphones, digital data services 
and prescribed carriage services , are reasonably accessible to all people in Australia on an equitable 
basis at affordable prices, wherever they reside or carry on business.  As a matter of course, Telstra's 
$A 1.8 billion USO claim (lodged on 28 September 1998)  was subject to scrutiny by the independent 
regulator, the Australian Communications Authority (A CA), which finally estimated Telstra's cost for 
1997/98 at $A 548 million.  Given the unprecedented size of the claim, however, and its potential to 
cause industry instability and deter investment, the authorities decided the setting of a subsidy would 
be set by agreement between the carriers, or capped at the historical level of $A 253.2 million.  The 
subsidies for 1998/99 and 1999/00 varied in line w ith ACA advice, at around $A 280 million in each 
year.  Following the 1997/98 claim, an extensiv e review of Australia's USO arrangements was 
undertaken and, in 2000, new arrangements were en acted.  Amongst other things, the Minister was 
empowered to set USO subsidies for up to three year s in advance, based on the advice of the ACA.  
This approach enables a range of factors to be c onsidered in setting subsidies.  According to the 
authorities, the setting of subsidies in advance provi des industry with certainty, helping it to plan.  
Subsidies of $A 240 million, $A 234.1 million,  and $A 231.7 million have been set for 2001/02, 
2002/03, 2003/04. 
P. 121, para. 107  
  The Australian film production industry recei ves government support in several ways.  The 
Australian Film Commission provides screen, cultu ral, and industry support through a range of 
measures including project development throug h script and other pre-production assistance, 
post-production grants and low-bud get production funding, and grants in support of a vigorous and 
diverse screen culture.
4  The Australian Film Finance Corporation (FFC), the principal government 
agency for funding the production of Australian film and television programmes , has annual public 
funding of $A 50 million for the period from 2001/02 to 2003/04.5  
P. 122, para. 110  
  Financial assistance to shippers of freight  between Tasmania and the mainland under the 
Tasmanian Freight Equalisation Scheme (TFES) was m odified and put in effect as of 1 July 1999.  
The modified TFES provides a more transparent and a ppropriate basis for assistance to shippers and 
defines more clearly the transport cost disadvantage (the difference between a shipper’s wharf gate to 
wharf gate cost and the notional road freight cost fo r an equivalent freight task).  All commodities are 
being compensated on an identical basis, that is, on a per twenty-foot container (TEU) basis.  The 
TFES assists in alleviating the comparative intersta te freight cost disadvantage incurred by the 
                                                     
 
4 Australian Film Commission online information.  Available at:  http://www.afc.gov.au/about/ 
whowe/index.html [17 April 2001]. 
5 Minister of Communications, Information Technology and the Arts online information.  Available at:  
http://www.dcita.gov.au/ [24 April 2001];  and Austra lian Film Finance Corporation online information.  
Available at:  http://www.ffc.gov.au/intro.html [17 April 2001].  S/WPGR/W/25/Add.4 
 Page 13 
 
 
 shippers of eligible non-bulk goods.  Eligible ite ms include goods produced in Tasmania for use or 
sale on the mainland as well as equipment and raw mate rials of Australian origin used as inputs by 
mining, manufacturing, agricultural, fishing, and forestry industries in Tasmania.  Cargoes intended for export, bulk cargoes, and goods manufactured overseas are ineligible.  Some 1,450 shippers 
benefit from the scheme.  
Dominican Republic -- WT/TPR/S/105  
 
P. 42-43, para. 105, 107 and 109
 
  In January 2001, the Dominican Republic notified the export subsidy measures maintained 
under the Free Trade Zone Law (Law No. 8-90) of 8 January 1990, and requested an extension of the 
transition period provided for in Article 27.4 of the WTO Agreement on Subsidies and Countervailing 
Measures.
6  The Ministerial Conference directed the Committee on Subsidies and Countervailing 
Measures to extend the transition period under this Article for certain export subsidies provided by 
Members.7 (...) 
More than half of the enterprises installed in FTZs are engaged in the production of textiles.  
The authorities indicated, however, that there had b een increasing diversification in recent years.  
Activities with particularly high growth rates include the production of jewellery, electronic components, marketing services , and pharmaceutical products.  Chapter IV(4) contains a more 
detailed description of individual industries operating in FTZs. (...) 
 
 As described in detail in the previous Secretariat Report on the Dominican Republic, 
Law No. 8-90 grants considerable incentives for a renewable period of fifteen years to enterprises 
located in FTZs.  These incentives in clude the exemption from the payment of:  income and corporate 
taxes;  value-added tax on impor ts, and import duties for all inputs and all equipment used in 
establishing and operating the company;  municipal tax es;  export taxes;  and various specific taxes.  
Additional benefits under this Law, such as a 20-y ear exemption from the above taxes, and rental 
subsidies, are available for companies located  in FTZs in the Haitian-Dominican border area. 
P. 82, para. 132
 
  The Tourism Development Law aims to promote tourism  development in specifically defined 
priority regions.  In particular, the Law offers exemptions from income tax and a 50% reduction of 
ITBIS for enterprises investing in tourism-related activities in the stipulated regions. In order to 
administer the benefits, the Law established a Council for Tourism De velopment (CONFOTUR), 
composed of representatives from various ministries and the National Hotel and Restaurant Association (ASONAHORES).  In addition, the Law created a Fund for the Promotion of Tourism, to 
promote tourism to the Dominican Republic in ternationally in a more effective manner. 
Zambia – WT/TPR/S/106  
 
P. 45, para. 80 
 
  Zambia provides a variety of incentives to assist  exporters and investment in export-oriented 
industries.  Under the 1993 Investment Act, most  recently amended in 1998, a concessional income 
tax of 15%, compared with the standard rate of 35%, is granted to exporte rs of non-traditional goods 
                                                     
 
6 WTO document G/SCM/N/74/DOM, 8 January 2002. 
7 WTO document WT/MIN(01)/17, 20 November 2001. S/WPGR/W/25/Add.4 
Page 14  
 
 who hold an investment licence.
8  Investments in the tourism  sector that earns foreign exchange in 
excess of 25% of gross annual earnings are exempt from duties and VAT. 
P. 79-80, para. 111  
  New investment in the sector has come from Zambians and from foreigners, largely through 
the privatization programme.  Revitalization is taki ng place in the Livingstone/Victoria Falls area, as 
Zambia is in a position to take advantage of the dec line in tourism in neighbouring countries. As part 
of the effort to expand tourism, the Government  has offered several incentives.  These included 
reducing corporate tax to 15% for tourist operators  and recognizing them as exporters of non-
traditional exports, and refunding VAT on costs incu rred in establishing tourism enterprises and zero-
rating accommodation offered by hotels, lodges, and guest houses  in the Livingstone District for two 
years.  A Tourism Development Master Plan h as lagged, however, because of the Government's 
failure to provide necessary resources in recent Budgets.  It is hoped that a bilateral partner will assist 
in developing the Tourism Master Plan in 2003.   
Japan -- WT/TPR/S/107  
 
P. 66, para. 41
 
  According to the authorities, no exclusive ri ghts or subsidies are given to Japanese-flag 
carriers.  Nonetheless, support measures for Japanese -flag carriers (the "International Ship Regime") 
have been unchanged since Japan's previous Review.
9  According to the authorities, the International 
Ship Regime does not distort trade in maritime transport services ;  it aims to place Japanese vessels 
on an equal footing with those of other countries that provide preferential tax treatment for their 
registered ships.  
Venezuela -- WT/TPR/S/108   
 P. 32, para. 65
 
  Venezuela provides a series of investment incen tives, primarily in the form of tax reductions 
or credits.  New investments made within five y ears of the entry into force of the 1999 Income Tax 
Law are eligible for a 10 per cent reduction in the top income tax rate in the farm, agribusiness, 
manufacturing, fisheries, fish-farming, livestock, tourism, construction , electrical power, 
telecommunications , and science and technology (other than  hydrocarbons-related) industries (or of 
80 per cent under certain conditions in the farm, livestock, fisheries and aquacultural sectors).  Tax 
reductions are also granted for greenfield investments in the hydrocarbons industry (8 per cent), hotel 
construction  (75 per cent) and in sectors that are considered to be of particular importance for the 
country’s economic development or that create jobs  (see Chapter III(4)(ii)(a)).  Investors undertaking 
industrial projects that are in their pre-operation stages may be exempted from the value-added tax for 
a period of five years or until the pre-operation stages have been completed. 
P. 66, para. 145-146 
 
 
Exporters of goods and services  may qualify for the recovery of VAT.  Upon application to 
SENIAT, the exporter is entitled to recover all tax es paid on inputs represented in imported goods 
                                                      
8 Investment licences are granted by the Zambia Investment Centre for all activities, excluding 
banking, insurance, mining and quarrying. 
9 These measures include tax breaks in sh ip-registration tax and local property tax.  S/WPGR/W/25/Add.4 
 Page 15 
 
 
 purchased and services received in conn ection with his export activities.10  In his application to 
SENIAT the exporter must provide a list of dome stic purchases of goods, domestic services received 
and services provided in Venezuela by non-resident natural or non-domiciled legal persons, indicating 
the amount invoiced and the VAT. 
Under cover of Partial Regula tions No. 2 of the Law on VAT, in force since 26 August 1999, 
exporters of goods and services may also recover the tax paid on domestic and imported purchases of 
capital goods and on services that increase the value of such goods or are necessary for them to 
perform the functions for which they are inte nded, made during the pre-operational phase of 
implementation of industrial projects essentially inte nded to produce goods for export or to generate 
hard currency.11  To qualify for the tax credit the volume of exports of goods or services must 
represent at least 50 per cent of the enterprise's operations, or 25 per cent if the goods produced are 
exempt from VAT.  In the case of tourism projects , foreigners must account, on average, for not less 
than 40 per cent of the stays each year.  The recovery regime has a maximum period of validity of five years from the commencement of the pre-operationa l phase.  If on the expiry of this period the 
applicant can show that the pre-operational phase h as not yet ended, the duration of the recovery 
regime may be extended for a further period of not more than five years. 
P. 67, para. 151
 
 
Free area activities are restricted to specific sectors or types of goods and services.  For 
example, the Free Area for the Promotion of Tour ism Investment in the Paraguaná Peninsula was 
established under the Law on the Establishment and Re gime of the Free Area for the Promotion of 
Tourism Investment in the Paraguaná Peninsula,  Falcón State, of 6 August 1998 for promoting the 
provision of tourism services and commercial services related to tourism.  The Cultural, Scientific and 
Technological Free Area of Mérida State (ZOLCCYT ), established under the Law on the Cultural, 
Scientific and Technological Free Area of Mérida  State of 14 July 1995 and regulated by Decree 
No. 2.714 of 9 September 1998, operates under a pref erential tax regime set up for the purpose of 
encouraging the production, dissemination and distribution of cultural, scientific and 
technological goods and activities  in the region.  Activities relating to the production, distribution , 
marketing and promotion of goods subject to the regime carried out within ZOLCCYT are exempt 
from income tax. 
P. 74, para. 190  
The entity responsible for tourism grants incen tives in the form of exemptions from customs 
duties on the importation of vessels, aircraft, vehicles and parts used for transporting tourists .  
P. 119-120, para. 165  
 
The supply of universal telecommunications services is guaranteed by the State.  CONATEL 
is therefore obliged to set as one of its priorities the supply of services intended gradually to meet the 
universal service obligation, ensuring inter alia , that everyone can be connected to a fixed public 
telephone network , and there is a sufficient number of public telephones, and there is general access 
to the Internet .  The universal service is guaranteed th rough the Universal Service Fund (FSU), 
whose purpose is to subsidize the infrastructural costs involved in compliance with the universal 
service obligations.  Universal service obligations are attributed through an open selection process to 
                                                      
10 The legal basis for the refunding of taxes is Resolution No. 454 of 8 June 2000 and Decree No. 596 
of 21 December 1999 (Partial Regulations No. 1 of the VAT Law concerning the Recovery of Tax Credits for 
Exporter Taxpayers). 
11 Decree No. 236 of 2 August 1999 adopting Partial Regulations No. 2 of the VAT Law on the 
Recovery of Tax Credits, published in Official Gazette No. 36.772 of 25 August 1999. S/WPGR/W/25/Add.4 
Page 16  
 
 the operator that seeks the lowest amount fro m the FSU.  The FSU’s resources come from 
contributions by operators of telecommunications se rvices for profit, with the exception of suppliers 
of sound broadcasting or open television services;  the contributions amount to 1 per cent of the 
operator’s gross revenue from the services covered by  the authorization.  As at September 2002, the 
FSU’s resources had not been utilized. 
P. 122, para. 179
 
 
Vessels  listed in RENAVE which are engaged in international transport  operations in 
Venezuelan ports benefit from a 10 per cent reduction in port and quay charges.  In addition, they only have to pay this tax once each calendar year , whereas foreign vessels must pay the tax each time 
they utilize the National Marine Navigation Support System ( Sistema Nacional de Ayudas a la 
Navegación Acuática ) (SNANA).  Other incentives include permanent exemption from the Tax on 
Capital Assets and from VAT on temporary or permanent import of vessels.  The Law also gives those who earn revenue from merchant marine activ ities or shipyards an income tax (ISRL) reduction 
amounting to 75 per cent of the amount of new investment in the purchase or lease of new vessels or 
navigation equipment, new maritime security tec hnology, and vocational training of their employees. 
P. 123, para. 182
 
 
The INEA proposes fees for marine-related services.  For commercial vessels, navigation fees 
are determined according to the v essel’s gross tonnage.  The principle of national treatment does not 
apply to the payment of such charges and navigation fees.  Vessels  listed in the RENAVE pay 50 per 
cent of the fee stipulated for the use of pilot services and 50 per cent of navigation fees.  This 
percentage may be applied to fore ign-registered vessels, but only on the basis of reciprocity.  The 
same applies to fees for tug and berthing services. 
P. 125-6, para. 198  
 
The air transport  subsector benefits from a number of tax incentives.  The Civil Aviation 
Law grants a five-year exemption (until the end of  2006) from all duties on imports of civil aircraft, 
accessories and parts, and all vehicles required for th e operation of aircraft. Imports of materials and 
equipment, accessories, and parts to be used for extinguishing fir es and air rescue are duty-free.  
Persons earning revenue from the s upply of public air transport services are granted an income tax 
reduction over five years amounting to 75 per cent of new investment in modernizing fleets or 
purchasing aircraft provided that they meet environm ental protection requirements, or for investment 
in incorporating new technology in the services th ey supply, or in training technical aviation 
personnel.  Aircraft to be used for public air tr ansport purchased until the end of 2006 are also exempt 
from the capital assets tax. 
Hong Kong, China – WT/TPR/S/109  
 
P. 35, para. 78  
  There do not appear to have been any major changes in the HKSAR's income tax system, and 
particularly the use of tax incentiv es, since the previous Review, with taxes on profits and earnings 
accounting for almost 60% of total taxes collected in fiscal year 2000/01 (Chapter I).  The income tax 
system retains low statutory tax rates and few tax in centives.  Statutory tax rates of 16% and 15% are 
levied on the profits of corporations and unincorporated businesses, respectively.
12  Effective tax rates 
on profits tend to be lower than statutory rates,  however, as a consequence of incentives, especially 
                                                      
12 There is also a Salaries Tax calculated on a slidi ng scale that cannot exceed the standard rate of 15% 
of total income.  S/WPGR/W/25/Add.4 
 Page 17 
 
 
 accelerated depreciation;  for example, companies may immediately write off 100% of expenditure on 
manufacturing plant and machinery and on computer  software and hardware.  Moreover, profits 
earned from international shipping13, and from airline services14, and interest income from deposits 
placed locally with all authorized banking institutions by corporati ons (except financial institutions) 
and individuals are exempt from tax.  Exemptions on property tax are also provided.  Owners of land 
or buildings are charged property tax at the standard  rate of 15% (less an allowance of 20% for repairs 
and maintenance);  however property owned by a corporation carrying on a business in Hong Kong, 
China is exempt from this tax.15  The authorities considered that during 1998/99 and 1999/00 the most 
important tax incentives were thos e affecting profits and salaries  taxes;  taxes forgone as a 
consequence of these incentives amounted to HK$31.2  billion.  No breakdown was available on the 
amounts of revenues forgone as a consequence of individual tax incentives, such as accelerated 
depreciation and the other exemptions.  
P. 50, para. 2  
  Sectoral policies have undergone little change si nce Hong Kong, China's Review in 1998.  By 
and large, Hong Kong, China conti nues to follow a policy of minima l intervention, allowing market 
forces to allocate resources.  Th e authorities maintain that no "winners" are picked nor "losers" 
salvaged, and that Hong Kong, China does not discriminate for or against particular sectors.  The Government's role is that of "proactive market en abler" or "facilitator" maintaining an institutional 
framework conducive to market development, pr oviding the required infrastructure and support 
services, fostering applied research and development together with technology transfer, and investing 
in human capital in all sectors of the economy.  Nevertheless, the 2002-03 Budget Speech states that 
Hong Kong, China needs to focus on "high-value-ad ded" economic activities and lists four areas as of 
particular importance:  financial services, logi stics, tourism, and producer and professional services.
16  
In addition, the Government takes "appropriate meas ures" to secure projects deemed beneficial to the 
economy when the private sector is not ready to inve st in them.  Some measur es are aimed at certain 
sectors.  For example, a 100% immediate write-o ff for tax purposes is accorded for expenditure on 
machinery and plant related to manufacturing pro cesses as well as computer hardware and software, 
and there is a reciprocal tax exemption for income earned from shipping services .  Furthermore, over 
the next few years the Hong Kong Government will waive the Mass Transit Company's (MTRC) 
dividend payments to help it fund a rail-link  to the Disneyland amusement park.17 
El Salvador – WT/TPR/S/111  
 
P. 54, para. 96  
  The Export Reactivation Law grants a refund of 6% of the f.o.b. value of the exports to 
natural or legal persons, whether Salvadoran or foreign, owning enterprises that export Salvadoran 
goods and services  outside the Central American area, excep t for exports of metallic and non-metallic 
mineral products derived from the exploitation of the s ubsoil.  In principle, traditional products such 
as coffee, sugar and cotton, are not eligible for this refund; however, subject to the approval of the Ministries of Finance and of the Economy, coffee and sugar with at least 30% of local content 
                                                     
 
13 Shipping profits are exempted from tax when they are derived from:  international operations of a 
Hong Kong registered ship;  the international operation of a ship by a non-resident shipowner from a country that provides tax exemption in respect of uplifts by a non-resident shipowner from Hong Kong, China;  and the 
international operation of a ship by an enterprise of  a country with which Hong Kong, China has signed an 
agreement for the avoidance of double taxation on/covering shipping income. 
14 Profits earned from airlines originating in a c ountry that has a double taxation agreement with 
Hong Kong, China. 
15 Inland Revenue Department (undated). 
16 The Government of the HKSAR (2002a). 
17 Financial Times,  10 July 2002. S/WPGR/W/25/Add.4 
Page 18  
 
 (calculated on the basis of the value added generate d in the factory) may benefit from it (for "organic" 
or "gourmet" coffee and refined sugar the refund appl ies irrespective of local content).  Between 1998 
and 2001, Salvadoran exports benefiting from the refund accounted for betwee n 7.6% and 8.2% of 
total exports (Table III.7). 
P. 55-56, para 101-103 and 106
 
 
 Domestic or foreign enterprises engaged in the production, assembly ( maquila ), 
manufacturing, processing or marketing of goods and services may be established and operate in a 
free zone.  The new law also explicitly mentions the provision of services linked to international 
and regional trade (such as storage, packing and repacking, re-exportation, grouping of 
packages, the distribution of goods and other related or complementary activities)  as an activity 
eligible for the benefits available in free zones. 
 Where enterprises satisfy the criteria described above but for technical reasons are not located 
in free zones, they may apply to the Ministry of the Economy to have their establishment declared an 
Inward Processing Warehouse ( Depósito para Perfeccionamiento Activo , DPA), provided that they 
are situated in an industrial, ag ricultural or agro-industrial zone, th eir facilities meet the appropriate 
industrial, occupational and envir onmental safety requirements, and they have a stable administrative 
and financial structure.  
 The advantages available to users who set up in free zones or inward processing warehouses 
include exemption from:   
 - Import duties on machinery, equipment, tools, parts and accessories, implements, etc. 
needed to carry out the activity encouraged; 
  - import duties on lubricants, catalysts, r eagents, fuels and any other consumables 
needed for the productive activity; 
 
 - income tax during the period in which they carry out their operations in the country, 
reckoned from the tax year in whic h the beneficiary began operating; 
  - municipal taxes on company assets and net wo rth, for the period in which they carry 
out operations in the country, from the first year of operation; 
 
 - tax on the transfer of real property, when purchasing real property to be used for the 
activity encouraged.   (...) 
  The tax concessions and incentives do not apply to  certain activities, in particular: hotels;  
travel agencies and airlines;  air, sea and land transp ort;  financial activities;  fishing, except for tuna 
fishing;  mining;  and the production and marketin g of sugar, ethyl alcohol, and any product that 
contains them.    
P. 81, para. 44-45 
 
  The legislative framework for the sector does not include provisions concerning end-consumer subsidies; however, the Government do es grant direct subsidies focused on low-income 
users.  In view of the shortage of resources, up to March 2001 the revenues of the public enterprise 
CL were indirectly tapped through discounts granted by that enterprise on invoices for energy  sales to 
distributors .  Since April 2001, these subsidies have been  covered by the State through the National 
Electricity and Telephony Investment Fund (Fondo de  Inversión Nacional en Electricidad y Telefonía, 
FINET) (see Section (iii)).  S/WPGR/W/25/Add.4 
 Page 19 
 
 
 P. 95-96, para. 97  
  The National Electricity and Telephony Inv estment Fund (FINET) was established for the 
purpose of facilitating access to electricity and telephone services for rural communities and low-
income families.  FINET's functions include subs idizing telephone infrastructure and the supply of 
telephone services  (and of electrical energy, see Section 4) in rural and low-income areas, provided 
that they benefit the community.
18  The Law provides for the Fund to subsidize these activities using 
the income obtained as a result of investing its r esources.  The assets of the Fund consist mainly of 
contributions from the State, 98.5% of the resour ces generated by granting concessions to use the 
radio-frequency spectrum, and all the resources pr oduced by concessions for generating geothermal 
and hydroelectric power.  In January 2002, 18 FIN ET-funded projects awarded by auction, with a 
total value of US$1.64 million, were in progress, together with 57 projects awarded by competition 
for funds ( concurso de fondos ), with a total value or US$5.54 million. 
Canada – WT/TPR/S/112/Rev1  
 P. 73, para. 180
 
  The Ontario Sound Recording Tax Credit is a 20% refundable tax credit for certain expenditures incurred by a qualifying corpora tion in the production of "eligible Canadian sound 
recordings " by "emerging Canadian artists or groups".
19 
P. 115, para. 82  
  In November 2000, the CRTC established a national revenue-based c ontribution collection 
mechanism effective 1 January 2001, whereby comp anies would contribute a percentage of their 
revenues that are considered to  be contribution-eligible (Decision 2000-745).  The purpose of the 
contribution is to fund local telephone service  in high-cost areas in Canada (i.e. rural and remote 
areas).  This mechanism was to be reviewed and finalized during 2002.
20  The authorities have 
indicated that, aside from subsidies to fund services in high cost areas, cross-subsidies have been 
eliminated in the telecommunications industry, and that the competitive services offered by the 
incumbent operators are not being subsidized by  other monopoly or near-monopoly service offerings. 
P. 122, para. 113  
  Following the 11 September 2001 attacks, th e Canadian Government announced a Can$160 
million programme to compensate Canadian air carriers  for losses resulting from the closure of 
Canadian airspace;  the authorities indicated that  Can$99.3 million were actually disbursed, of which 
Air Canada received Can$69.8 million.
21  The Government has also provided indemnity for third-
party aviation war-risk liability follo wing the cancellation of this coverage by insurance underwriters.  
The programme was extended until 1 March 2003. 
                                                      
18 Electricity consumption associated with water extraction and pumping projects and with buildings 
used for providing educational and health services, if community owned or administered, are considered to be of 
benefit to the community. 
 
19 Department of Finance online information.  Available at:  http://www.fin.gc.ca/taxexp/2001/ 
taxexp01_e.pdf 
20 See:  Telecom Decision CRTC 99-16 available on line at:  http://www.crtc.g c.ca/archive/Decisions/ 
1999/DT99-16.htm; and Decision CRTC 2000-745, at:  http://www.crtc.gc.ca/archive/Decisions/2000/DT2000-
745e.htm. 
21 Canada newswire on line information.  Availa ble at: http://www.newswir e.ca/releases/April2002/ 
18/c5924.html. S/WPGR/W/25/Add.4 
Page 20  
 
  
Burundi – WT/TPR/S/113  
 
P. 43, para. 81-82
 
 
 The Free Zone Law provides for four types of free zone enterprise:  agricultural and 
stock-breeding enterprises, industrial and handicraft enterprises, commercial enterprises;  and service 
enterprises.  Some activities do not qualify for the fr ee zone regime:  trade in precious metals and 
mineral ores;  exploration, mining, enrichment, refining, buying and selling of mineral ores;  and 
coffee-related activities such as roasting.  One of th e conditions of eligibility is export of the entire 
output (in the case of commercial firms, import and re-export of imported goods in an unaltered state 
or after packaging).  The generation of "substantial"  value added (of at least 35 per cent) is a condition 
applicable to agricultural and stock-breeding, indu strial and craft enterprises in free zones.  The 
service enterprises eligible for free zone enterprise status are those intending to provide one or more 
of the following  services:  assembly of computer equipment;  software manufacture;  packaging  for 
export;  printing and publication;  production and distribution of cinematographic films;  sound 
recording;  and organized tourism services.  Both foreign and domestic investors may obtain free zone 
status.  An advisory commission set up by the Mini stry of Trade and Industry is responsible for free 
zone enterprises. 
 The tax benefits granted by the decree-law ar e total exemption from existing or prospective 
indirect taxes, from registration fees and stamp duties,  and from profits tax during the first ten years of 
operation, followed by a regime in which the taxati on rate is reduced to 15 per cent instead of the 
standard 40 per cent rate.  Any free zone enterprise that has created more than 100 permanent jobs for 
Burundian nationals is subject to a 10 per cent profits tax, and any free zone enterprise which 
reinvests at least 25 per cent of the profits earned over the last ten years of its existence pays 10 per cent less than the standard rate.  Commercial free zone enterprises are liable to a 1 per cent turnover 
tax, this rate being reduced to 0.8 per cent in cases where the enterpri se creates more than 20 
permanent jobs.  The dividends distributed to sh areholders are exempt from all taxes during the 
lifetime of the company.  Free zone enterprises are also exempt from the 3 per cent tax on the wages of foreign workers.   
P. 87, para. 110
 
  
Bujumbura's hotels  have a capacity of 1,067 beds.  The State intervened in this sub-sector by 
participating in the capital of the Novotel and S ource du Nil hotels and the Lake Tanganyika Club.  
The Club has been privatized, while the Source du Nil is in the process of privatization.  The 
Government has signed an agreement with the hotel  chain Accor for the management of Novotel.  
Outside Bujumbura, there are hotels at Kayanza,  Ngozi, Gitega, Muyinga, Cankuzo and Kirundo.  
The national park of Ruvubu has its own eco-tourism camp.  Foreign nationals must pay their hotel 
bills either in foreign currency or in Burundi fran cs purchased through official channels (a certificate 
must be provided by the bureau de change).  Pr ices can be set freely.  The Government is not 
systematically evaluating the performance of the hotels and has not yet developed a hotel classification system.  
Southern African Customs Union – WT/TPR/S/114  
 
P. A1-96, para. 50 (Botswana)
 
  Although there are no universal service provisions in the Telecommunications  Act, BTA is 
responsible for implementing g overnment policy on such services and on special tariffs for 
disadvantaged users.  The Government is current ly formulating a new universal service policy to 
replace existing subsidies paid annually to BTC,  under the Rural Telecommunications Programme, to  S/WPGR/W/25/Add.4 
 Page 21 
 
 
 provide basic services to rural users.  BTA is developing a programme based on a universal service 
fund, and is proposing legislative changes.    
P. A1-103, para. 80 (Botswana)  
  Tourism  became eligible for government suppor t under the Financial Assistance Policy 
(FAP) in 1996 (Financial Assistance Policy (FAP-Tourism), 1996). However, this scheme has 
recently been discontinued and replaced by the Citizen Entrepreneurship Development Agency 
(CEDA), which also covers tourism.  
P. A2-147, para. 57 (Lesotho)
 
 
 In 2002, the Lesotho Government enacted  the Tourism Act, 200222, which establishes the 
Lesotho Tourism Development Corporation (LTDC) , a 51% government-owned corporation with 
wide powers, including the designation of tourism  development areas and provision of financial 
assistance in the shape of grants, loans or tax ex emptions for tourist development.  The LTDC is 
chaired by the Director of Tourism and has a Board comprising representatives of Government, local 
associations, and the private sector. 
P. A3-180, para. 39 (Namibia)  
  Farmers benefit periodically from emergenc y drought relief.  In 2002/03, for example, 
N$1.5 million was given to livestock farmers north of the veterinary Cordon Fence in the form of a subsidy of N$150 per head for cattle delivered to the abattoirs.  The Meat Board administered the 
scheme on behalf of the Government.  Drought re lief costing N$36.4 million was provided from April 
1996 to November 1998,
23 and again in 1998-99 at a cost of N$2.1 million.24  Marketing incentives 
(subsidies) were paid to farmers at N$15 or  N$100 per animal sold, depending upon size, to 
encourage farmers to reduce stock levels.  A re stocking scheme to replace breeding animals sold 
during the drought also paid N$13 or N$70 per head.  Transport  subsidies of N$3.77 per kilometre 
were paid to contractors transporting animals to markets.  
P. A3-202, para. 62 (Namibia)  
  After announcing in 1999 that new entrants would be allowed by 2000, the Government 
extended the timetable to 2004 at the latest, when  the telecommunications market would be fully 
opened.  Namibia is a founding member of the Telecommunication Regulators’ Association of 
Southern Africa (TRASA), inaugurated in September 1997 among SADC nations.
25  The Government 
approved a Telecommunications Policy and Regulat ory framework in 1999 along the lines of the 
SADC Protocol on Transport, Communication and Meteorology, and the Model Regulatory 
Framework for Telecommunications.  From 2002 unt il 2004, the Government may defer competition 
in any market segment for socio-economic reasons .  The Government will establish a Universal 
Service Fund to finance universal services, such as basic telephone services  in rural areas.  All 
telecommunications equipment should comply with the National Operators Network and have type 
approval from the Namibian Communication Commission.    
                                                      
22 Act No. 4 of 2002. 
23 WTO document G/AG/N/NAM/7, 12 July 1999. 
24 WTO document G/AG/N/NAM/11, 12 May 2000. 
25 Other founding members are Botswana, Mozambique, South Africa, Tanzania, and Zambia.   S/WPGR/W/25/Add.4 
Page 22  
 
 P. A4-283, para. 81 (South Africa)
 
  Overall policy in road transport is the respons ibility of the DoT. The planning, construction, 
and maintenance of roads and bridges, other than  those under SANRAL or local governments, are the 
responsibility of the provincial governments. Streets are the responsibility of metropolitan, district or 
local communities. The bulk of the road and street sy stem is financed by national and local taxes, but 
SANRAL operates 600 km of state toll roads, and has concessioned 1,300 km to private consortia which toll those roads. While legislative and exec utive powers for public transport are a provincial 
competency, the DoT is responsible for policy formul ation, monitoring, and strategic implementation. 
The DoT is currently working on redesigning the subsidies scheme for public transport, so as to 
redress the current practice of paying subsidies to buses and commuter rail
26, to the exclusion of the 
taxi industry, and of subsidizing only about 35 % of the commuting public. The National Land 
Transport Transition Act (Act No. 22 of 2000)27, provides for a new system of 'permissions' to replace 
permits for taxi and bus tr ansport, and is meant to lay the founda tion for a fully integrated, long-term, 
user-orientated land transport system. Both DT I and DoT are engaged in a major initiative to 
recapitalize the taxi fleet. 
P. A4-284, para. 86 (South Africa)  
  The Industrial Development Corporation (IDC)  currently provides me dium-term finance in 
the form of loans, suspensive sales, equity and qu asi-equity for the development and expansion of the 
tourism industry (Table AIII.1). Also, the Depart ment of Trade and Industry (DTI) provides the 
subsector with the Small and Medium Enterprise Development Programme 
(SMEDP)(Chapter III(4)(ii)). According to the au thorities, other than exchange control and 
immigration regulations, there are no barriers to foreign entry.    
Table AIII.1 
Incentive schemes, January 2003 
Name of scheme Objective Access criteria  Description 
(...) 
    
Capacity Building 
Support for Retail 
Finance Intermediaries (RFIs) To provide capacity building 
support to new RFIs to initiate 
a loan portfolio and to assist 
existing RFIs to expand their loan portfolios. To qualify, an RFI must: 
 - be legally constituted;  
 - have clearly defined SMME target markets;   - have sound accounting and financial systems;   - have sound internal organizational guidelines, policies and procedures;  - have capacity to carry out current and 
proposed projects;  
 - have clear and achievable short and medium term objectives.  Support will be structured around the 
capacity needs to the RFIs.  The grants 
range from R 10 000 to R 500 000.  
(...) 
    
Seed Loans for Retail 
Finance Intermediaries (RFIs) To provide initial capital to 
new organizations to initiate their portfolio, and to fund 
operational expenses over a 
predetermined period. To qualify and RFI must: 
 - be legally constituted;  - have clearly defined SMME target markets; 
 - have sound accounting and financial systems; 
 - have sound internal organizational guidelines, policies and procedures;  - have capacity to carry out current and proposed projects;  - have clear and achievable short and medium 
term objectives; 
 - have matching funds of at least 15% of envisaged operating expenses. The amount ranges between R 50 000 
and R 20 million.  Seed loans are converted to grants once mutually agreed 
upon performance criteria are met.  
Source: Department of Trade and Industry online inform ation. Available at:  http://www.dti.gov.za/ 
 review.asp?iSDivID=143&iEvent_ID=172  
                                                      
26 In the Department's budget for 2002/2003, the allocation for buses and rail amounts to R 37 million 
(National Department of Transport, 2002b). 
27 This has been amended by the National Land Transport Transition Amendment Act (Act No. 31 of 
2001).  S/WPGR/W/25/Add.4 
 Page 23 
 
 
 New Zealand – WT/TPR/S/115  
 
P. 77, para. 36  
 
 New Zealand grants subsidies to  education, broadcasting, film production, land transport, 
air transport, business, and tourism services .28  Most domestically produced services, with the 
exception of some financial services, are subject to the GST.  Financial services, with the exception of most insurance services (GST does not apply to life insurance and reinsurance), are exempt from GST 
because of the difficulty of levying the GST on this t ype of service.  This exemption is under review 
and the proposal is that the business-to-business s upply of financial services will be zero-rated instead 
of exempt.
29 
Morocco – WT/TPR/S/116  
 
P. 27, para. 75  
 
 Exporting enterprises are exempt from corporati on tax (IS) and the general income tax (IGR) 
for a period of five years, after which there is a 50 per cent reduction in these taxes.  For enterprises exporting services, including hotels , the exemption or reduction only applies to turnover in foreign 
currency.  Enterprises established in prefectures or certain provinces covered by a decree and 
handicrafts enterprises are eligible for a 50 per cent reduction in the IS or IGR for a period of five 
years. 
P. 58, para 131
 
  The 1995 Investment Charter gave investors add itional benefits (Chapter II(6)).  In 2000, the 
Government also established the Hassan II Fund for economic and social development
30 which, 
inter alia , promotes investment in certain industrial sectors.31  It contributes up to 50 per cent of the 
purchase price of industrial land and up to 30 per cent of the cost of building business premises.32  
P. 87-88, par. 101-102  
  In view of tourism 's importance, the Government is seeking to promote investment, for 
which benefits are available under the Investment Ch arter, the Hassan II Fund, the Finance Laws, and 
special provisions (Table IV.5).  A reducti on in VAT for hotels is under consideration. 
 On 10 January 2001, a framework agreement was signed between the Government and the 
General Confederation of Moroccan Enterprises (CGEM) reaffirming that tourism was a national priority and defining several objectives for the comi ng decade, including an increase in the number of 
                                                     
 
28 For a full description of these programmes see WTO document S/WPGR/16/Add.2,23 July 1997. 
29 GST and Financial Services [Online].  Available at:  http://www.taxpolicy.ird.govt.nez/publications/ 
files/html/gstfinserv/cl.html [20.11.2002]. 
30 Decree No. 2-00-129 of 16 March 2000 establishes the trust fund No. 3.1.04.04 called the “Hassan II 
Fund for economic and social development”;  Dahir No. 1-02-02 of 29 January 2002 enacts Law No. 36-01 
creating the Hassan II Fund for economic and social development and its implementing Decree No. 2-02-93 of 12 March 2002. 
31 For example textiles (spinning, weaving and finishing);  electronics;  clothing and knitted and 
crocheted articles;  automobile sub-contracting (m anufacture of automobile components and precision 
engineering);  leather;  tourism ;  fishing;  environmental protection throug h the treatment, recycling and 
industrial use of waste . 
32 The contribution to the cost of the land is based on a maximum price of DH 250/m2 and the cost of 
building on a maximum cost of DH 1,500/m2.  The contribution may be 100 per cent if it only concerns 
purchase of land. S/WPGR/W/25/Add.4 
Page 24  
 
 tourists to 10 million by 2010.  The implementati on of these objectives has been codified in the 
Implementation Agreement signed on 29 October 20 01, which constitutes the operational charter for 
the new tourism policy (called "Vision 2010").
33  The following are some of the measures taken to 
achieve the objectives:  liberalization of land owne rship and State participation in the cost of 
purchasing land (through the Hassan II Fund);  tax exem ptions and simplification;  better training and 
a more professional approach in tourism-related o ccupations;  facilitation of access to financing;  
increased resources for promoting tourism;  restru cturing of the Moroccan National Tourism Board 
(ONMT)34;  availability of special financing for the renovation of hotels;  liberalization of air 
transport;  and the creation of a strategic steering committee.  At the legal level, two decrees have 
recently been adopted on the classification of hotels and the status of tourist facilities;   a new text 
regulating tourist transport, independently of the te xt on passenger transport, is under consideration.35 
Table IV.5 
Indicative framework for investment in tourism 
Taxes Description 
Registration tax Reduction in the fees for establishing tourism companies, with a rate of 0.5 per cent for 
registration duties. 
Exemption from registration fees for purchase deeds for land to be used for investment 
projects within a maximum period of 36 months. Reduced rate of 1 per cent for registration f ees for emphyteutic leases on properties to 
be used for hotels and accessory buildings. 
Reduced registration fees fo r the sale of businesses. 
Customs duties Exemption from customs duties for inve stment of DH20 million or more under 
agreements concluded with the Government. 
IS and IGR Total exemption from IS or IGR on the part of the taxable base corresponding to the 
turnover of hotel companies in foreign curre ncy over a period of five years and a 50 per 
cent reduction as of the sixth year. 
Reduction of 50 per cent in the IS for five years for all companies setting up in the 
following provinces inter alia :  Larache, Nador, Tangiers, Asilah, Tetouan. 
Reduction of 50 per cent in the IS, without any time limit, for any company setting up 
in the province of Tangiers, which can be combined with the aforementioned benefits. 
Other benefits Free convertibility guaranteeing foreign invest ors total freedom to transfer tax-free 
profits (capital, capital gains and income). 
Total exemption from the business tax and the urban tax for a period of five years for investment in creating an enterprise  and for any additional investment. 
Reduction of 100 per cent on dividends and other yields from holdings received by 
companies. Reductions and exemptions for capital gains and profits made when disposing of or 
selling fixed assets. 
Ceiling of DH50 million for the basis used to calculate the rentable value of taxable investment. 
 
Source : Information provided by  the Moroccan authorities.  
 
 P. 93, para. 120 
 
 
 In order to lower transport costs, the Gove rnment has granted several tax benefits, for 
example, exemption from VAT, with the right to deduction, for international transport operations 
and the supply of related services ;  exemption from VAT for the import of motor coaches, lorries 
and capital goods needed for TIR activities;  exemp tion from VAT, with the right to deduction, for the 
purchase of motor coaches, lorries and related capita l goods;  imposition of a minimum customs tariff 
(2.5 per cent) on imports of trailers for the tr ansport of textiles and clothing products for export;  
                                                      
33 "Vision 2010" fixes precise targets, for example, r eaching a figure of 10 mil lion tourists by 2010, the 
provision of 80,000 additional rooms, DH30 to 40 billion in investment in hotels, generation of DH80 billion in 
foreign currency earnings annually, and the creation of 600,000 new jobs. 
34 A draft law on the restructuring and organization of the ONMT has already been prepared. 
35 Decree No. 2-01-186 of 5 March 2002 amending and supplementing Decree No. 2-81-471 of 
16 February 1982 establishing classification of touris t facilities, and Decree No. 2-02-640 of 9 October 2002 
implementing Law No. 61-00 on the status of tourist facilities.  S/WPGR/W/25/Add.4 
 Page 25 
 
 
 refund of VAT on diesel fuel to public road trans port companies;  and extension of the deduction of 
VAT on diesel fuel to enterprises engaged in th e road transport of goods on their own account. 
P. 98, para. 149  
  An offshore financial centre, which is composed of banks and portfolio management 
companies and holdings , is situated in Tangiers.  Only subsidiaries and branches of well-known 
international banks, with minimum ca pital or allotment of US$500,000 may be set up there.  Offshore 
banks are exempt from registration and stamp duty when constituting or increasing capital or 
purchasing property for leasing.  They are also exempt from VAT on the purchase of capital goods and supplies needed for conducting their activities,  duties and taxes on the import of equipment, 
furniture and capital goods needed for their operations.  Dividends paid out to shareholders, interest 
on customers' deposit accounts and investments and on loans granted by offshore banks are also 
exempt from levies.  Offshore banks benefit from optional imposition of corporation tax (IS) for the 
first 15 years following the date of issue of approval at a rate of 10 per cent, or a flat rate tax fixed 
according to the equivalent value in DH of US$25,000,  free of any other tax on profits or revenue;  for 
offshore holdings, the flat rate tax is the equivalent  in DH of US$500 for the first 15 years after their 
establishment;  after that period, they are subject  to IS according to the ordinary law regime. 
Indonesia – WT/TPR/S/117  
 
P. 31, para. 48 
 
 
 Investment incentives apply to all, including foreign, investors.  They include duty and VAT 
concessions on imported inputs and capital goods, a nd additional incentives for export-oriented 
investment as well as investment in certain regions (e.g. eastern Indonesia).  Special investment incentives, such as income tax, value-added tax, and luxury tax exemptions, may also be approved by 
BKPM on a case-by-case basis.
36  The criteria for granting tax holidays, of up to eight years, for new 
investors in designated "pioneer" industries, such as capital goods, sea and air transport , and 
agri-businesses, were clarified in 199937;  these measures were largely eliminated under the IMF 
package in January 2000. 
P. 85-87, para. 69-71  
  The Government has acquired equity in recapitalized private banks :  four banks taken over 
by IBRA and seven joint national domestic banks (Table IV.3).
38  All seven state banks also needed 
substantial recapitalization and restructuring;  f our of them (Bank EXIM, BDN, BBD, and Bapindo) 
were merged to become Bank Mandiri in September 1998.39  State ownership of banks has increased 
substantially, and now dominates the sector (almost 85% of total thir d-party bank liabilities and three-
quarters of the sectors' assets at end 2001).  State ba nk divestment has lagged.  It was initially due to 
be completed by end 2001 with BCA and Bank Niag a being divested in 2000;  at end 2001, only 
32.5% of BCA had been divested (10% to the public).40  However, in 2002, IBRA sold a 51% stake 
(out of a total state share of 97.2%) in Bank Niaga for Rp 5.6 trillion to a joint-venture, and 40% (out 
of total state share of 70.3%) of BCA.  Bank Bali wa s also merged with four weak recapitalized banks 
(Bank Universal, Bank Patriot, Bank Prima Express, and Bank Artamedia) to form Bank Permata in 
September 2002.  In early 2002, the Government pr esented a comprehensive plan to Parliament for 
                                                      
36 U.S. Embassy Jakarta (2001a). 
37 Presidential Decision No. 7, Evaluation Criteria for Taxation Facilities in Particular Industrial Fields. 
38 Of the 13 banks taken over by IBRA, nine were merged with Danamon in 2000, and BCA, Niaga, 
and Bali were recapitalized. 
39 The other state banks (BNI, BTN, and BRI) have co ntinued operations subject  to recapitalization and 
restructuring.  The four state banks accounted for some half of total banking assets at end 2001. 
40 Bank Bukopin was fully divested in late 2001 by the original owners exercising share option rights. S/WPGR/W/25/Add.4 
Page 26  
 
 divesting remaining banks by 2004, including majo rity stakes in Bank Lippo and Bank Danamon, and 
of 30% of Bank Mandiri, in 2002.
41  The Government's latest timetable, announced in November 
2002, is to divest at least 51% of Bank Danamon in  early (March) 2003 by placement with a strategic 
partner, and to sell (as yet unspecified) sharehol dings to the public in Bank Lippo, Bank Mandiri, and 
Bank International Indonesia.42 
P. 95, para. 102  
  The Directorate General of Land Communica tions (Ministry of Communications and 
Information) is responsible fo r road and rail transportation.   Transportation of dangerous goods, 
special goods, and heavy-duty equipment is regul ated, including by technical requirements.   Transport 
border crossings were informally established w ith Malaysia, Brunei Darussalam, and Papua New 
Guinea in 2002.   Transport border crossing regulations a pply to both goods and passengers, and 
cabotage restrictions apply.  Foreign investment is prohibited in public transport (taxi and bus 
services).  The Government subsidizes passenger rail and bus (economy) travel , but intends to 
phase out such subsidies gradually.  
P. 97, para. 110 
 
  International tourism  is increasingly important for Indonesia, particularly for Bali where one 
third of the economy depends directly on tourists.  Nationally, there were approximately 5.1 million 
visitors, accounting for 9% of total exports (in value terms), in 2001.
43  However, the industry has 
suffered severely from several recent developmen ts, including the political upheavals during 1998 and 
the East Timor crisis in 1999.  The industry was again hit by the 11 September 2001 events in the 
United States, which adversely affected global tour ism, and the bombing in Bali in October 2002.  
Occupancy rates at hotels in major tourist destinatio ns have declined recently from already low levels 
to around 30%;  in Bali they dropped from 60% to below 10% after the bombing.  The Government implemented various rescue (i n late 2002), rehabilitation (first half of 2003) and normalization 
programmes (second half 2003).  The rescue progra mme included special support arrangements and 
additional overseas export promotion.  Bali touris m is beginning to rebound. Most foreign tourists, 
especially in Bali, are Japanese, Australian, or Taiwanese.  
Niger – WT/TPR/S/118  
  
P. 44, para. 64-65
  
 
 Enterprises which invest in one of the activities covered by the Investment Code are eligible 
for tax and customs incentives during the investment  phase and for five years during the operating 
phase, depending on the approval regi me applicable – A, B or C (Table III.3).  The sectors covered by 
the Code are production or processing of primary agricultural, livestock or fisheries products, 
production for export, mining or processing of quarryi ng products or mineral substances (access to 
which is subject to the Mining or Petroleum Codes, where applicable), air transport , and the 
building of hotels or social housing .  Investment in the production of handicrafts44, cultural and 
                                                      
41 Parliament established a special committee to oversee each bank sale. 
42 Indonesia's latest agreement with the IMF included  launching the sale of majority stakes in Bank 
Danamon (for conclusion by end 2002) and in Bank Lippo by July, to be finished D ecember 2002.  The majority 
divestment of Bank Niaga was to be completed by 15 September 2002 (see IMF, 2002d). 
43 World Bank (2002). 
44 Investment of CFAF 2 to 25 million; exemption from tax on industrial and commercial profits (BIC), 
the minimum fiscal tax (IMF), the busi ness licence fee, and property tax.  S/WPGR/W/25/Add.4 
 Page 27 
 
 
 artistic production45, the building of hotels, schools and clinics46, and technological innovation47 
may also be eligible for special incentives. 
 Approved investment enjoys exemption from duties and taxes on imports of material and 
equipment needed to set up a production unit, unl ess these are available locally.  The benefits given 
during the operating phase are mainly fiscal becau se enterprises in Niger are subject to heavy and 
dissuasive taxation: the business licence fee (12 per cent), the minimum fiscal tax (1 per cent), and tax 
on industrial and commercial profits (45 per cent).  Employers must also pay social contributions amounting to 15.4 per cent of the payroll.   The benefits increase in proportion to the amount of the investment or the creation of jobs for Niger’s nationals. 
P. 52, para. 95-96 
 
 
 Niger has not notified the WTO of its various subsidy programmes, but according to the authorities it intends to do so.  According to the in formation available to the WTO Secretariat, these 
programmes concern in particular the incentives un der the Investment Code (section (4)(ii)), the 
sectoral regimes (mining, petroleum, telecommunications ), and the agreement between the State and 
the company COMINAK, which exploits uranium. 
Senegal – WT/TPR/S/119  
 
P. 48-51, para. 66 and 69
 
  The following are the sectors covered by the Code: agriculture, fishing, livestock breeding 
and related processing activities, storage and packaging of products of plant, animal or fish origin; 
manufacturing;  prospecting, mining or  processing of mineral substances;  tourism and other hotel-
related activities;  cultural activities by a small- or medium-sized enterprise
48; services provided 
by small- or medium-sized enterprises in the areas of health, education, ass embly and maintenance 
of industrial machinery and equipment; port infrast ructure work; installation and management of 
railways.  The authorities are currently examining broader sectoral coverage for the Code, including 
telecommunications and “new technologies” such as ca ll centres so as to give investors access to the 
guarantees and benefits of the Code.  (...) 
 Enterprises approved under the Investment Code are eligible for a number of benefits under 
the common regime and one or more of the four pr ivileged regimes (Table III.3).  The four privileged 
regimes correspond to the four priority objectives of the Investment Code:  the promotion of small- 
and medium-sized enterprises (SMEs);  the upgr ading of local resources through processing in 
Senegal;  the development of t echnological innovation through research or the use of research 
findings;  and the establishment of economic activ ities in regions in the interior of Senegal.49  
                                                      
45 Exemption from duties and taxes, including VAT, except for the statistical charge, on 
cinematographic production equipment and building materials, tools and equipment produced locally or 
imported and utilized on one si ngle occasion, where equivalent local pro ducts are not available, provided that 
they are used directly for th e purposes of the investment. 
46 Minimum investment of CFAF 50 million; during the installation phase, exemption from duties and 
taxes, including VAT, except for the statistical charge, on materials, tools and equipment produced locally or imported where equivalent local products are not available.  
47 Fiscal rebate of two thirds of the cost incurred in purchasing or finishing the innovation and of BIC 
for the fiscal year following that in which the innovation is introduced. 
48 Defined in Article 17 of the Code.  A small- or medium-sized enterprise is one that invests CFAF5 to 
200 million, creates at least three jobs for Senegalese nationals, and keeps proper accounts. 
49 Zone A includes the city of Dakar and its surroundings;  Zone B covers the rest of the Dakar region 
and the region of Thiès;  Zone C includes the regions of Diourbel, Louga and Kaolack;  and Zone D covers the 
regions of Fatick, Kolda, Tambacounda, Ziguinchor and Saint-Louis. S/WPGR/W/25/Add.4 
Page 28  
 
 Although Senegal has not notified the WTO of any trade-related investment measure, one of the 
conditions of approval of projects under the privile ged regime for the upgrading of local resources 
through processing in Senegal is that 65 per cent (i n value terms) of intermediate consumption should 
be of Senegalese origin or that the cost of im ported products should represent less than 35 per cent of 
the total cost of the products obtained after processi ng in Senegal.  The Senegalese authorities indicate 
that there is no exhaustive list of enterprises benefiting from this regime. 
Honduras – WT/TPR/S/120  
 
P. 21, para. 31
 
 
 Honduran legislation grants fiscal incentives for investment in certain tourism  projects (see 
Chapter III(4)(v)). 
P. 67-68, para. 157-161  
 
As explained in section (3)(iv), Honduras has two schemes providing fiscal incentives for 
exporting goods.  The Law on Tourism Incen tives (Decree No. 314-98 of 18 December 1998), 
including its amendments, also offers a range of fiscal incentives to encourage national and foreign 
investment in the development of the tourism sector. 
Enterprises eligible under the Law on Tourism Incentives are companies located in areas 
deemed by the Honduran Tourism Institute to have  tourism potential, which are engaged in activities 
directly related to tourism  and which provide services such as accommodation (e.g. hotels, lodges 
and time-share apartments);  inward tourism;  air and water passenger transport ;  vehicle rental ;  
and recreation , with the exception of casinos, nightclubs or private clubs, discotheques, games 
rooms, cinemas or television rooms, billiard parlours, gymnasiums, saunas and the like, Internet cafés and teaching centres.  Convention centres  and Honduran craft workshops and shops  are also eligible 
for incentives under the Law. 
The Law on Tourism Incentives provides 10-year income tax exemption for projects that are 
"new", i.e. projects by Hondurans or foreigners "t hat do not involve expansion, remodelling, change 
of ownership, or the like".
50  Moreover, beneficiaries under the Law pay no duty or other taxes on 
imports of printed materials for the promotion of tourism projects or of Honduras as a tourism destination;  new motor vehicles for sole use within the enterprise;  new and used aircraft and boats;  
new goods and equipment needed for tourism construc tion and the launching of tourism projects (with 
a few exceptions);  and replacement goods  and equipment for a period of 10 years. 
Expansion, remodelling or replacement project s carried out by established entrepreneurs 
whose activities fall within the scope of the Law ar e also eligible for the above benefits, with the 
exception of income tax exemption.  The Law furt her provides that persons whose activities are not 
directly related to tourism but who invest in ne w projects involving the remodelling or expansion of 
convention centres or hotels may deduct up to 15 per cent of their investment returns for tax purposes 
over a period of 10 years. 
The Ministry of Tourism authorizes the granting of benefits under the Law on Tourism 
Incentives.  Those interested in making use of the Law must apply to the Ministry with full details of 
the project they wish to develop.  Before issui ng its final decision, the Ministry consults other 
government bodies, including the Honduran Tourism Institute. 
                                                     
 
50 Article 5 of the Law on Tourism Incentives. 
  S/WPGR/W/25/Add.4 
 Page 29 
 
 
 Bulgaria -- WT/TPR/S/121 
 
P. 67, para. 88  
 
"Free trade zones" were originally established in Bulgaria in 1987.  The Customs Act of 1998 
redefined them as "free zones".51 Currently six such zones exist.  Free zones are formally part of 
Bulgaria's customs territory but separated from it by fixed checkpoints. Import duty and VAT are not paid on imported goods entering free zones unless th ey are released for sale in Bulgaria, while 
Bulgarian goods may be stored in free zones without payment of VAT. Goods leaving a free zone may be exported or re-exported from Bulgaria or be brought into another part of the customs territory 
of Bulgaria. The perimeter and the entry and exit po ints of free zones are subject to supervision and 
control by the customs authorities. Handling, storage, and warehousing  are the most common 
activities, but goods may be admitted to the free zones for inward processing or processing under customs control, as temporary imports, or under the normal import regime. 
P. 70, para. 101-102
 
 
According to the authorities, state aid is provided for purposes of compensating high 
production costs in key economic sectors that have considerable social implications, such as the 
energy and transportation sectors , and for other social considerations, such as aid to the poor, 
producers in mountainous regions, employment promotion, and environmental protection.  
In line with the Government's conservative fiscal stance, the amount of state aid offered has 
declined both in absolute and relative levels in recent years. As a percentage of GDP, state aid 
declined from 3.3 in 1999 to 0.7% in 2001. Similarly, direct subsidies have declined, from 2.5% of GDP to 0.6% in 2002. The mining and transport sectors have benefited the most from state aid; with assistance for the production of coal (29.5%) and provision of transport services (29.0%) accounted for almost 60% of the total in 2001. 
Guyana – WT/TPR/S/122  
 
P. 53-54, para. 84
 
  Guyana applies a number of incentive schemes;   some are applied across-the-board and are 
contingent on an investor meeting specific crite ria or making certain investments.  The incentives, 
include benefits for industrial estates, accelerat ed depreciation, flat business tax rate, export 
allowances, loss carryforward, construction allowan ce, and research and development allowances.  
Guyana also offers several sector-specific progra mmes.  In this respect, tax and tariff incentive 
programmes are available to promote trade and investment in tourism , fisheries, mining, forestry, 
manufacturing, and agriculture (Table III.10).  Locals and foreigners are treated alike with respect to 
these incentives. 
P. 93-94, para. 157 
 
  In the 2002 Budget Speech the Government annou nced plans to enhance the contribution of 
the tourism sector through, inter alia, the abolition of the 10% room tax for tourism facilities that are 
deemed to be resorts.
52  The Government of Guyana is encouraging an increase in the number of hotel 
rooms and improvement in existing plant and other facilities in the tourism  sector.  To facilitate this 
                                                      
51 The main legislation is Decree No. 2242 of 1987 ( State Gazette  No. 55/1987, amended in 
No. 153/1998); the Customs Act, 1998, Article 166-179 and its implementing regulation, Article 620-653; the VAT Act, the Excise Act, and their implementing regulations.  
52  Ministry of Finance (2002a), p. 50. S/WPGR/W/25/Add.4 
Page 30  
 
 growth, the government has made available a pack age of incentives.  This comprises mainly duty-free 
and consumption tax concessions for basic furnishings, plant, equipment, and building materials.  In 
order to qualify for duty and consumption tax exemption an applicant must provide, inter alia, a 
project profile or business plan and an environmenta l impact assessment.  Duty-free concessions will 
be limited to 25% of the value of the investment fo r refurbishing, and 50% of the value of investment 
for new facilities or expansion. 
Thailand – WT/TPR/S/123 
 
P. 58-59, para. 84
 
 
 In August 2000, the BOI undertook various re forms in its investment incentive schemes53:  
(...) 
- The BOI selected five targeted industries:   agri-business, automobiles, fashion,  
electronics, and high-valued services54;  these industries appear to be eligible for 
exemptions of import duties on certain machinery and a corporate tax holiday for 
eight years, irrespective of the location of the project.55 (...) 
P. 79, para. 41  
  Several government institutions were formed to  help rehabilitate the financial sector.  The  
Financial Sector Restructuring Agency (FRA), under the Ministry of Finance, was established in 1997 to determine the viability of 56 suspended debt -laden finance companies and to review their 
rehabilitation plans.  These firms (with total assets of B 860 billion or 11% of the financial sector) 
were liquidated, and asset auctions completed in  late 1999.  The state-owned Asset Management 
Corporation, established in 1997, purchased some of th ese assets as "bidder of last resort";  its assets 
totalled B 25.8 billion at end of 2000. The Fina ncial Institutions Development Fund (FIDF), 
established in 1985 to rehabilitate distressed instit utions, was instrumental in taking over and re-
capitalizing/restructuring troubled banks .  It has also provided a blanket guarantee for depositors and 
non-subordinated creditors of ever y financial institution incorporated in Thailand since 1997.  The 
authorities plan to establish the Deposit Insuranc e Agency (DIA) to operate a limited deposit 
insurance scheme when the economy and financial sector achieves sustainable growth and stability.  
Draft legislation establishing the DIA is being considered by the Ministry of Finance.   
P. 88, para.81
 
 
 Urgent tourism development measures, ai med at raising annual tourism earnings by 
B 50 million, were introduced in April 2001 to stimulate the economy.  The package included 
preventing attractions from deteriorating, improved immigration procedures, and market promotion.  
The Committee for National Tourism Development, chaired by the Prime Minister, was formed in 
2001 to prepare tourism plans and policies.  Governme nt promotion is directed at attracting long-stay 
tourists.  The average length of stay of internati onal visitors is eight days.  The Government is 
revising the Hotel Act of 1935 and introducing a hote l grading system.  The Board of Investment 
offers tax and other investment incentives for hotels  with more than 100 rooms, and is considering 
                                                      
53 According to Board of Investment Announcement No. 1/2543 (1/2000). 
54 BOI Bulletin No.68/45, 10 April 2002 "BOI Targets Five Industries For Proactive Marketing 
Campaign" [Online].  Available at:  http://www.boi.g o.th/english/focus/boi_pr_target_industries02.html. 
55 These incentives also seem to a pply to enterprises engaged in othe r priority activities.  Priority 
activities are:  agriculture and agri culture products;  technological and human resource development;  public 
utilities and infrastructure;  environmental protection;  and targeted industries.   S/WPGR/W/25/Add.4 
 Page 31 
 
 
 granting special privileges to foreign investors in certain types of accommodation, such as retirement 
homes.  
Chile – WT/TPR/S/124  
 
P. 54, para. 149  
 
 The Fund for the Promotion and Development of  Remote Areas, instituted in 1980, has as an 
objective to contribute to the development of various  provinces in Chile's extreme north and south by 
providing assistance to small- and medium-sized ente rprises investing there.  Funds are accorded only 
to producers of goods and services in the construction , machinery, equipment, special animal feed, 
and small-scale fishing industries.  Annual indi vidual investment must not exceed U.F. 50,000, 
equivalent to US$1.3 million.  Funds granted unde r this programme may not be accepted together 
with any other public benefit granted for the same goods  or services.  Pursuant to Law No. 19.606 of 
30 March 1999 the Fund contributes 20% of the cost of the investment or reinvestment in projects carried out until 31 December 2007.  The amount paid  out in 2002 was Ch$1,422 million, equivalent 
to US$2.3 million.  
P. 81, para. 121 
 
  In 1994, the Chilean Government establishe d the Telecommunications Development Fund to 
encourage improved telecom service to  rural and low income areas.  The original goal of the fund was 
to provide public telephone service  to about 6,000 unserved localities, a target that was met over the 
five-year period 1995-99.  After this objective w as achieved, the government redefined the fund to 
support community telecenters, which offer various kinds of communication services, including 
internet access , to the public.  An initial target is to in stall telecenters in about 90 municipal towns 
with over 8,000 rural inhabitants.  By 2006, there w ould be telecenters in all 341 municipalities.  The 
Fund is administered by Subtel and financed by contributions from the government budget.  
Turkey -- WT/TPR/S/125  
 
P. 68, para. 114
 
  Few changes have been introduced to the overall Turkish investment incentive programme, 
which became region- rather than sector-specific in 1993.
56  The Programme for Incomplete and/or 
Operating Enterprises was abolished on 30 June 2001.  There are two main investment encouragement 
programmes:  the General Investment Encouragemen t Programme (GIEP), and Aids Granted to Small 
and Medium-sized Enterprises (SMEs) Investme nts. The purpose of these programmes is to 
encourage and orient investments, in order to re duce regional imbalances within the country, and 
create new employment opportunities, while using t echnologies with greater value added. To qualify 
for any of these programmes, potential investors have  to apply for an investment incentive certificate, 
which is non-transferable.  In addition, regional programmes, desi gned to address specific needs of 
under developed regions, are put into fo rce for specified periods as necessary. 
                                                      
56 Several incentive schemes run in parallel to the general investment aid programme.  These include 
assistance provided to exporters (such as duty concessions, export finance, insurance, guarantee, promotion, and 
marketing assistance) (section (3)(v)), to the agriculture sector (including input subsidy payments), to the energy  sector (such as subsidies for the production of hard coal), to maritime  (tax incentives), and to tourism  
(including corporate income tax exemption). See Chapter IV for details.
 S/WPGR/W/25/Add.4 
Page 32  
 
 P. 68-69 para. 116
 
  Under the Aids Granted to SMEs, companies entitled to receive investment incentives are 
those: operating in manufacturing, agri-industry, tourism , education  and health , mining, and 
software  industries; employing up to 250 workers; a nd holding assets not exceeding TL 600 billion.  
The incentives are the same as under th e GIEP, except that different ceilings are set for the amount of 
credit to be allocated and the interest rate to be applied depending on the regional location of the 
investment.
57 
P. 108, para. 98  
 
The BSRP also aims to promote a healthier financial situation among  private banks through 
the implementation of internationally accepted minimu m capital requirements.  In February 2002, the 
BRSA announced a new plan to recapitalize banks  after a strict three-level audit of the 26 major 
private money deposit banks.58  Prior to the audit, all banks ha ve to switch to inflation adjusted 
financial statements.  The next phase of the plan involves the possible use of public money but with 
incentives to maximize shareholders' contributions59, as well as to merge with other banks. 
Furthermore, the plan seeks to accelerate new lending by requiring that a portion of any public funds 
be on-lent to non-related parties. 
P. 114-115, para. 128  
  Special tax incentives are provided to Turkish i nvestors in the maritime subsector.  The wages 
of seafarers working on ships registered under Turkey's International Ship Registry are exempted 
from income tax and funds;  and revenu es gained from operating and transferring ships  registered 
under Turkish International Ship Registry, are exem pted from personal income and corporate income 
tax.  Profits from non-operation activities are not c overed by the exemption.  Book profits resulting 
from sales of vessels can be deducted from the purchase price of the same kind of replacement vessels 
within three years and after deducti ng the realized depreciation amount.
60 
P. 116, para. 138  
  Turkey's railway system consists of over 10,000 km of track.
61  The share of railways in total 
transport has diminished over the years, to 4% of freight and 2% of passenger transport.  The Turkish 
State Railways (TCDD), a state-owned enterprise af filiated to the Ministry of Transport (MT), has de 
jure monopoly in providing railway passenger and freight  transport services. It owns and operates the 
whole railway  system, together with seven ports that have rail access (i.e. Haydarpasa, Mersin, 
Iskenderun, Derince, Izmir, Samsun, and Bandirma) . There are no private rail operators.  TCDD has 
freedom to introduce fares on a market basis or to increase them, after verbal approval by the MT.  
                                                      
57 The investment credit limit allocated to SMEs is TL 300 billion, with a 10% interest rate in priority 
development regions and 15% in other regions, and maturity of four years. The operational credit limit for 
SMEs is TL 120 billion, with a 15% interest rate in the priority development regions and 25% in other regions, 
and maturity of two years.  With the investment credits, no repayment is made in the first year. 
58 The auditing stage was completed in mid-June 2002.  The first two audits were made by major audit 
firms (the first chosen by the bank itself and the second by the BRSA), and the third by BRSA. 
59 Three banks were assessed to have capital needs: the administration of Pamukbank was assessed to 
have a capital deficit of US$2 billion as of December 2001, and was taken over by the SDIF; the capital of 
Sekerbank was increased by its shareholders; while Vakiflar Bankasi was given a subordinated loan amounting to TL213.3 trillion by the SDIF upon a resolution of the BRSA. 
60 Turkish Interna tional Ship Registry Law No. 4490  of 16 December 1999, Article 12. 
61 During 2001-05, the objective is to set up 185 km of new tracks, renew 1,800 km, and complete 
180 km of signalling works and 160 km of electrification (Undersecretariat of State Planning 
Organization, 2001) .  S/WPGR/W/25/Add.4 
 Page 33 
 
 
 The construction of new railway infrastructure a nd ports is the responsibility of the Directorate 
General of Ports, Railways and Airports C onstruction of the MT.  In 2002, TCDD received 
government subsidies amounting to TL 266.8 trillion for:  track maintenance and repair, in accordance 
with Law No. 233 and TCDD's main statutes; uneconomic lines, under Decree No. 7-11254 of 
23 January 1976; express trains; and ferry traffic  on lake Van. Subsidies paid to TCDD totalled 
TL 197.8 trillion in 2001 (124% of TCDD's reve nue for operational activities and 19% of total 
railway expenditure). 
P. 118, para. 144  
  The Turkish Government remains active in the tourism  subsector.  It grants incentives for 
tourism investments in accordance with the Touris m Encouragement Law; provides infrastructure and 
public services for tourism; defines zones with  high tourism potential; promulgates designated 
tourism centres or areas by decree; elaborates and approves land-use plans; conducts environmental 
controls; promotes the country abroad; carries out research and collects statistics; and provides vocational training.  Local administrations are res ponsible for similar matters  at the local level.  
Investors in the tourism sector also have access to  incentives granted under the general investment aid 
programme (Chapter III(2)(iii)(d)). 
United States – WT/TPR/S/126  
 
P. xi, par. 26
 
 
 As the United States is among the world's largest producers, exporters, and importers, 
domestic support although not targeted at exports  may significantly affect trade.  Assistance to 
domestic producers may take the form of  tax exemp tions, financial outlays, and credit  programmes.  
Since the last Review of the United States, ther e have been sizeable financial transfers in air 
transport  and agriculture.  In air transport, govern ment financial support was extended to U.S. 
carriers in the aftermath of 11 September 2001.  In agriculture, the Farm Security and Rural 
Investment Act of 2002 expanded the coverage of marketing loan provisions;  and introduced a 
counter-cyclical income support mechanism that, although not linked to current production, increases subsidies when commodity prices fall, and vice versa.   The new legislation may thus further blunt the 
effects of market signals on production decisions, and runs the risk of large increases in assistance in 
the event of price falls.  Under the new Act, governme nt payments in 2003 were expected to approach 
the high level of 2001;  such payments had dec lined substantially in 2002 when commodity prices 
increased and virtually no ad hoc emergency payments were disbursed. 
P. 80, para. 212-213 
 
 
Nine of the 50 programmes notified at federal le vel are in favour of agri culture;  five federal 
programmes are in favour of the aerospace and aeronautic sectors.  The energy  sector was the 
recipient of the largest number of notified pr ogrammes (14), mostly geared towards energy 
conservation, although measures to encourage th e development of domestic coal, oil, and gas 
resources were also notified.  Six programmes app lied to fisheries, including subsidies for fishing 
vessels, research and development in management of U.S. fisheries, and conservation of marine 
resources.  Assistance to lumber and timber was also notified, as were five programmes to encourage 
the extraction and processing of mineral resources, including iron ore and steel.  The subsidy 
notification also contains a description of the Emergency Steel Loan Guarantee Act of 1999. 
P. 132, para. 127  
 
Under the Capital Constructi on Fund (CCF) and Constructio n Reserve Fund (CRF), U.S. 
citizens owning or leasing vessels may obtain tax bene fits to construct qualified vessels.  The CCF S/WPGR/W/25/Add.4 
Page 34  
 
 provides tax-deferral benefits to vessel operators  in U.S.-foreign commerce, Great Lakes, non-
contiguous domestic trade, and U.S. fisheries.  CCF vessels must be built in the United States and 
documented under the laws of the United States.  The purpose of the CCF programme is to make up 
for the competitive disadvantage operators of U. S.-flag vessels face in the construction and 
replacement of their vessels relative to foreign-flag operators whose v essels are registered in countries 
that do not tax shipping income.
62  The CRF is a financial assistance scheme that provides tax deferral 
benefits to U.S.-flag operators;  eligible parties can  defer gains attributable to the sale or loss of a 
vessel, provided the proceeds are used to expa nd or modernize the U.S. merchant fleet. 
P. 134-135, para. 139-144  
 
In order to assist the U.S. aviation industry afte r the 11 September attacks, the U.S. President 
signed into law, on 22 September 2001 the Air Tran sportation Safety and System Stabilization Act 
(ATSSSA), which made available funds to compensate U.S. air carriers'  losses suffered as a result of 
the attacks.63  Under the Act, up to US$5 billion in compensation was authorized for direct losses 
incurred by air carriers as a result of any federa l ground stop order issued by the Secretary of 
Transportation (or its continuation);  and for the in cremental losses by air carriers incurred beginning 
11 September 2001 and ending 31 December 2001, as a dire ct result of the attacks. At the close of the 
programme on 31 December 2002, the DOT had transf erred a total of just over US$4.6 billion to 426 
U.S. air carriers. 
In addition to the federal grants, the Act ma de available to airlines up to US$10 billion in 
federal loan guarantees.64  The guarantees were to be allocated to airlines on a discretionary basis by 
the Air Transportation Stabilization Bo ard, established for that purpose.65  Borrowers had to submit 
their applications no later than June 2002.  Appr oximately US$1.6 billion in  loan guarantees has been 
committed;  the only application pending as at October 2003, was that of United Airlines. 
Two distinct programmes were established under the ATSSSA to help airlines meet increased 
insurance costs after September 2001.  The two pr ogrammes require two separate transactions and 
may be in effect for different periods of time.  Under the first FAA Aviation Insurance Program, the 
FAA provides, inter alia , indemnity for third-party aviation war-risk liability beyond US$50 million 
per occurrence, following the cancellation of this coverage by commercial insurance underwriters.66  
There is no aggregate limit to the overall disbursements, but the maximum per occurrence limit is twice the limit the carrier had in  its war risk liability policy prior to 11 September 2001.  Since 
November 2002, domestic airlines may, in addition to extended third party wa r risk coverage, obtain 
expanded coverage for war risk hull and passenger, crew, and property liability. 
The second programme, also run by the FAA, consists, inter alia , of reimbursements to U.S. 
air carriers for the increase in the cost of insura nce premiums, relative to the premium that was in 
effect at the beginning of September 2001.  Paym ents for this support were to be made from a 
revolving fund established for this purpose.
67  Approximately US$60 million was disbursed for 
30 days of additional war risk premium expense im mediately after 11 September 2001.  According to 
the authorities, no further payments were being made or contemplated. 
                                                      
62 MARAD online information.  Available a t:  http://www.marad.dot.gov/TitleXI/crf.html. 
63 The Act is available online at:  http://www.t reas.gov/offices/domestic-finance/atsb/hr2926.pdf. 
64 See for example U.S. Genera l Accounting Office GAO (2001). 
65 The Regulations for Air Carrier Guarantee Loan Program are found in the Federal Register of 
12 October 2001.  Available online at:  http://frw ebgate.access.gpo.gov/cgi-bin /getdoc.cgi?dbname=2001_ 
register&docid=f:12ocr2. pdf. 
66 Information available online at:  http://insurance.faa.gov. 
67 The legislation is available online at:  http://apo.faa.gov/Ins urance/49USC443.pdf.  S/WPGR/W/25/Add.4 
 Page 35 
 
 
 Prior to September 2001, support to the U.S. air transport industry had been confined largely 
to the provision of federal subsidies for service to remote areas. The main programmes were the 
DOT's Essential Air Service (EAS) Subsidy Pr ogramme (under which approximately US$100 million 
were spent in 2002) and the grants provided to  small communities under the Small Community Air 
Service Development Pilot Program (approximate ly US$20 million), under which funds were 
appropriated for the first time in FY 2002 (Oct ober 2001-September 2002).  Under the EAS Program 
a community is eligible for subsidies if it is more  than 70 miles away from the nearest medium or 
large hub airport, and if the service costs less than US$200 per passenger. 
To cut costs after 11 September 2001, major airlin es have retreated from airports in small and 
midsize cities.  According to a recent GAO St udy, new financial incentives granted by local 
governments since September 2001 have been the most effective instrument to attract airline services 
back to small communities.68  These have consisted mostly of subsidies, revenue guarantees, and 
reduced airport fees. 
P. 139, para. 161  
 
The universal service provisions in the Communications Act of 1934 require common 
carriers, as defined under the Act, to provide access to telecommunications services  at reasonable 
and affordable rates throughout the country, including rural, insular, and high costs areas, and to 
public institutions.69  To finance this universal service, telecommunications companies must pay a 
percentage of their interstate end-user revenues to  the Universal Service Fund.  The contribution is 
revised quarterly depending on the needs of the universal service programmes.  In the fourth quarter 
of 2003, this contribution factor was 9.2%.  In 2002, universal service support needs totaled 
US$5.9 billion. 
P. 148, para. 199  
 
Government-sponsored enterprises (GSEs) are private companies established and chartered 
by the U.S. Government for public policy purposes in the financial sector .  GSEs include:  the 
Federal National Mortgage Association (Fanny Mae) ;  the Federal Home Loan Mortgage Corporation 
(Freddie Mac);  the Farm Credit System (Farmer Mac);  the Federal Agricultural Mortgage Corporation;  the Federal Home Loan Banks;  a nd the Student Loan Mortgage Association (Sallie 
Mae), which is on a congressionally mandated track to  rescind its GSE charter.  While the benefits 
provided to the GSEs vary according to each GSE' s charter, some common benefits include an  
exemption from state and local taxation and potent ial access to a back-up credit line with the U.S. 
Treasury.  In addition, GSE debt is eligible fo r use as collateral for public deposits, for unlimited 
investment by federally chartered banks and thrift s, and for purchase by the Federal Reserve in open-
market operations.  GSE securities are not guaranteed by  the U.S. Government, but they are treated as 
government securities for certain purposes under U.S. securities laws.  GSE obligations are classified 
by financial markets as "agency securities" and priced  at yield above those on U.S. Treasuries, but 
below those on AAA corporate obligations.
70  The Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (GSE Act, P.L. 102-550) estab lished the current regulatory structure for 
Fannie Mae and Freddie Mac;  other GSEs are regulated under a different legal structure. 
                                                      
68 See General Accounting Office (2003a). 
69 An explanation of the U.S. universal service regime is available online at:  
http://www.fcc.gov/wcb/universal_service/welcome.html. 
70 Congressional Budget Office (1985), and (2003b). S/WPGR/W/25/Add.4 
Page 36  
 
 The Gambia – WT/TPR/S/127  
 
P. 17-18, para. 17
 
 
Under the Investment Promotion Act, speci al incentives are available to encourage 
investment in "priority" sectors and activities (Table II.2) .  In addition to investing in these sectors, 
other eligibility criteria are that:  investment must  be organized as a company or partnership under the 
Law of The Gambia;  the minimum investment of fixed assets must be US$100,000 or the equivalent in local or any other freely convertible currency; and that investments are outside the free zones.  Any investor satisfying the eligibility criteria may ap ply to GIPFZA for a Certificate of Special 
Investment.  These certificates are valid for five years, and are renewable.  In considering an 
application for a certificate for special investment, GI PFZA is required to carry out an appraisal of the 
proposed project or business to contribute to the ach ievement of the following objectives:  (a) the 
generation of new foreign-exchange earnings or savings through exports, or  import substitution, or 
service activities;  (b) the use of local materials, suppliers, and services;  (c) the creation of 
employment opportunities in The Gambia;  (d) the introduction of advanced technology or upgrading 
of indigenous technology;  (e) the contribution to locally or regionally balanced socio-economic 
development;  and (f) any other objectives that the Agency may consider relevant for achieving the 
objectives of the Investment Promotion Act.  It is not required for a project to meet each of these criteria.   No specific benchmarks or objective i ndicators have been developed to date to assess the 
performance of a project or business against these de sired objectives, giving GIPFZA a certain degree 
of discretion in awarding investment incentives. 
Table II.2 
Priority sectors and activities under the Investment Promotion Act 
Sector Qualifying activities 
Agriculture - Crops: groundnuts, cashew, sesame, cotton, cereals 
- Animal husbandry: livestock, poultry including meat   processing, tannery, export of live animals 
- Floriculture and horticulture, agro-processing 
Fisheries - Aqua-culture: fish and shrimp farming 
- Fishing and fish processing at industrial level 
Tourism - Eco-tourism: national heritage and others 
- Up-country tourism: motels, tourist camps, sport fishing, river cruising 
- Hotel development for a 4 or 5 stars 
Forestry - Development of private/communi ty forest parks agro-forestry plantation 
Manufacturing - Assembling and packaging processing 
- Foundry and forging 
- Light pharmaceuticals and cosmetics 
Energy - Electricity generation and distribution 
- Renewable energy sources: solar, wind, hydro-energy 
Skills development - Vocational traini ng: carpentry, welding, masonry  
- Development of specialized skills : electronics, computing, others 
Other services - Financial services 
- Off-shore services 
- Health and veterinary services - River and air transportation 
- Information technology 
Minerals exploration and 
exploitation - Petroleum exploration: refer to  Petroleum Act and regulations 
- Mining of precious stones and ot hers: refer to Mineral Act. 
Communications - Transportation (land, sea, and air) 
- Communication equipment. 
Source: Government of The Gambia.   S/WPGR/W/25/Add.4 
 Page 37 
 
 
  
P. 19-20, para. 23-25  
 
In its capacity as administrator of free zones, the GIPFZA has developed criteria that all 
investors (regardless of the category to which they belong) must satisfy in order to benefit from 
free-zone incentives71:  
− investments must be in the following activities : warehousing, breaking bulk, 
assembling, storage, grading, cleaning, mixi ng, labelling, packaging and repackaging, 
processing, manufacturing, telecommunicati on, information technology, energy, 
financial and offshore services, health a nd veterinary services, or transportation 
services;   
− transactions are to be carried out in specified foreign exchange; 
− activities must significantly add value to qualify finished products for conferment of 
origin status;   
− investments must generate empl oyment and train nationals;   
− a substantial portion of output (the benc hmark currently used by GIPFZA is 70%) 
must be exported to foreign markets, th e remainder can be sold on the domestic 
market, in which case they are treated as imports;  and 
− investment must contribute positively to domestic capital formation. 
 Applications to operate within the free zone  are submitted to GIPFZA, which is required to 
make a decision within a period of 30 days.  Licences are granted for a period of not less than one 
year, and not greater than 30 years, and are renewable.  GIPFZA may suspend, amend or revoke a licence if the licensee fails to carry out any authorized  activity within six months of the issue of the 
licence; substantially ceases, for a reasonable length of  time, its activities in the zone; or contravenes 
the provisions of the Free Zones Act or conditions attached to the licence.  Appeals may be lodged 
with the Secretary of State responsible for trade.   
Investment incentives generally take the form of customs duty exemptions on selected items, 
exemptions from various domestic indirect taxes, tax holidays, and a special scheme for accelerated 
depreciation (Chapter III(4)(i)).  The incentives provided  to free-zone investors take the form of tax 
and duty concessions or exemptions  (Chapter III(3)(v)), and apply e qually to all three classes of 
investor. 
P. 43, para. 64
 
 
Amongst the criteria that The Gambia Invest ment Promotion and Free Zones Agency is 
required to take into account in granting in centives are: the capacity of the business under 
consideration to contribute to the generation of ne w earnings or savings of foreign exchange through 
increased exports; import substitution;  and the level of local content (materials or services) of the 
goods to be produced or of the services  to be supplied.  
P. 81, para. 81  
  The Gambia's 1.3 million people shared 33, 300 fixed telephone lines in 2000, i.e. a 
teledensity of 2.56 (Table IV.13), which was above  the African average of 2.48, and well above the 
sub-Saharan Africa's average of 0.75.
72  Fixed line telephony services are provided by GAMTEL, a 
                                                      
71 The criteria are not specified in the Free Zones Ac t itself.  Please see online information. Available 
at: http://www.gipfza.gm/Free_ Zones_/body_free_zones_.html 
72 ITU (2001). S/WPGR/W/25/Add.4 
Page 38  
 
 public monopolist, with a subscrib er base of 38,359 at end 2002.
 73  The Permanent Secretary of the 
Department of State for Communication, In formation and Technology (DOSCIT), and a 
representative of DOSFEA, are members of the GAMTEL board of directors.  GAMTEL is also the Government's vehicle for the maintenance and expa nsion of the telephone network system, and for the 
development of fibre-optic cables and wireless  telephone technology.  GAMTEL does not receive 
government funding for its recurrent expenses.  R ecent capital expenditure plans for the maintenance 
and expansion of the tele phone network is supported primarily by  donor funds, and to a lesser extent  
government counterpart funding, and own fund s. GAMTEL has begun the implementation of an 
expansion project, running from 2003 to 2007, and main ly financed by a grant of €15 million, which 
aims to significantly increase the number of fixed-line phones.  GAMTEL currently pays an annual 
subvention of D3 million to The Gambia Radio and Television Services . 
 
Sri Lanka – WT/TPR/S/128  
P. 54
 
 
Table III.10 
Export incentives 
(a) Non-exhaustive list of ince ntives available to exporters  
Beneficiary  Incentive  Policy objective 
To direct/indirect exporters of 
non-traditional products and 
servicesa  Concessionary income tax rate of 15% for 20 years 
commencing as of 1 April 1995 Encourage exports 
(...) 
   
a These include ship repair, refurbishing of ship cargo containers , and provision of computers and software . 
(b)  Incentives to export trading houses 
Income tax holiday  Import duty exemption Annual 
turnover 
(US$ million) Full 10% 15% 20%  Capital goods Raw materials Exemption 
from exchange 
control 
5-10 n.a. 5 years Thereaf ter n.a.  Yes Yes Yes 
10-25 5% tax up to 
5 years 5 years Thereafter n.a.  Yes Yes Yes 
>25 0% tax up to 
5 years 5 years  Thereafter n.a.  Yes Yes Yes 
Source:  Government of Sri Lanka;  and Board of Inve stment of Sri Lanka [Online].  Available at:  
http://www.boisrilanka.org/web/ investinc_common.php?conID=1. 
 
P. 58-59, para. 103 (and Tables AIII.3 and AIII.4)  
  Sri Lanka offers a wide range of tax incentives,  notably tax holidays, primarily for investment 
purposes.  In 2002, Sri Lanka notified a list of tax in centives available equally to national and foreign 
enterprises investing in Sri Lanka.
74  The 2002 Budget proposed the rationalization of tax incentives 
but not their elimination.  The Government w as committed to granting no new exemptions either 
under the Board of Investment (BOI) or Inland Revenue Department (IRD) regimes.75  Under the IRD 
                                                      
73 Strictly speaking, the Government's share in GAMTEL is 99%; while The Gambia National 
Insurance Company has a 1% share.   
74 WTO document G/SCM/N/74/LKA, 7 January 2002. 
75 Sri Lanka operates two distinct direct tax systems:  the normal regime, and the other under the 
auspices of the BOI.  However, moves appear to be afoot to amend the BOI Act so as to abolish this distinction.  S/WPGR/W/25/Add.4 
 Page 39 
 
 
 regime, income tax exemptions are provided usually fo r five years.  Despite this policy, there are still 
an array of tax incentives in place, which seem to overlap;  some are contingent on export and 
investment performance ( Table AIII.3 and AIII.4 ).  These incentives are considered exceptions to 
the new policy, according to which, a "limited" num ber of incentives would remain in place.  These 
were aimed at assisting non-traditional exports (i.e. ot hers than exporters of tea, rubber and coconut), 
and sectors such as information technology, electronics, industrial tools, and food processing, as well 
as, investments exceeding Rs 500 million in specific ser vices.  There is also a 5-10 year income tax 
holiday for pioneering investment in power genera tion, transmission and distribution, and for the 
development of highways, sea and airports, railways, and water services .  Upon expiry of the tax 
holiday, these enterprises will be subject to a 15% income tax.76  The revenue forgone as a result of 
these tax incentives has not been assessed. 
Table AIII.3 
Investment incentives under the Board of Investment (BOI) regime, September 2003 
Qualifying Criteria Incentives 
Concessionary 
income tax Import duty exemptions Exemption from 
exchange 
control Category Minimum 
investment 
(US$) Minimum 
export 
requirement
(% of 
output) Full tax 
holidaya 
10%, 15%, 20% Capital goods Raw 
material  
(...) 
        
Export-oriented 
services 150,000 70 5 years 10% 2 years 
15% thereafter 20% n.a. Yes Yesb Yes 
Small-scale 
infrastructure 
projectse 500,000 n.a. 5 years 10% 2 years 
15% n.a. 
20% thereafter Yesd No As determined 
by the Board 
IT related training 
institutes (min 300 
students in IT related 
Training Institutes) n.a n.a 3 years 10% 2 years 
15% thereafter if 
the industry is 
export oriented 20% thereafter if the industry is 
not export 
oriented Yes No No 
(...) 
 
Power generation, 
transmission and 
distribution  
 
10,000,000   
  None  
 
6 years  
 
10% n.a. 
15% thereafter 
20% n.a.  
 
Yes
d  
 
No  
 
As determined 
by the Board 
Development of 
highways, sea ports, 
airports, water 
services 25,000,000 None 8 years 10% n.a. 
15% thereafter 20% n.a. Yesd No As determined 
by the Board 
a The tax holiday period will start from the y ear the enterprise begins to make profits  or not later than two years of the date  of 
commencement of commercial operations or production whichever is earlier, except for existing enterprises undertaking an 
expansion of its same location or new location. 
b On raw materials used to produce exports. 
d During the project establishment/implementation period 
e Power generation, tourism and/or recreati on, warehousing and/or cold storage, garb age collection and/or disposal, constructio n of 
houses (not less than 25 housing units in no more than 4 locations), construction of hospitals. 
f If exports are less than 70% only dur ing the project implementation period. 
g IT enabled services includes call centre or contact centres, transcription (data entry), data centres, hosting centres, e-gov ernance, 
related projects and any other related activity determined by the Board. 
Source: Board of Investment of Sri Lanka [http://www.boi srilanka.org/web/inves tinc_common.php ?conID=1 
[04 April 2003] and Advanced Technology Ince ntive Scheme [Online].  Available at: 
http://www.gov.lk/imst/activities/a dvanced_technology/ index.html. 
                                                      
76 IMF (2002c). S/WPGR/W/25/Add.4 
Page 40  
 
 Table AIII.4 
Investment incentives under the Inland Revenue Act  
Category Qualifying Criteria Incentive:  Exemption from Income Tax 
(...) 
   
Companies engaged in: 
(...) - any project engaged in the provision of 
refrigerated transport services or cold 
room storage services 
 Company must be incorporated on or after 
1 April 2002;  or 
a company incorporated as a new 
undertaking prior to 1 April 2002;  or   
a company incorporated after 1 April 2002 
with a minimum investment of 
Rs 2.5 million;  or 
Company is an investment of more than 
Rs 250 million Five years (from the year in which the 
company starts making profits or no later 
than two years from the date that the company starts operations whichever is earlier) 
Companies engaged in infrastructure 
development projects: 
- development of an airport, seaport, 
highway or railway; 
- development of an industrial park 
- development of a warehouse or store 
- provision of any sanitation facility or 
solid waste management system 
- power generation, transmission or 
distribution 
- development of water services 
- urban housing or town centre 
development  Company must be incorporated on or after 
1 April 2002 with minimum investment of  
Rs 1,000 million 
Rs 2,500 million Rs 5,000 million Rs 7,000 million Exemption period is for 
 
6 years 
8 years 
10 years 12 years (from the year in whic h the company starts 
making profits;  or no later than two years 
from the date that the company starts 
operations whichever is earlier) 
Small-scale infrastructure facilities: 
- generation of power 
- tourism and recreation 
- warehousing and cold storage 
- garbage collection or disposal 
- construction of houses 
- construction of hospitals 
 (...) Company must be incorporated on or after 
1 April 2002 with minimum investment of  Rs 10-50 million made within one year from 
incorporation 
 Five years (from the year in which the 
company starts making profits;  or no later than two years from the date that the 
company starts operations whichever is 
earlier) 
   
Source:  Government of Sri Lanka. 
P. 60, para. 107  
 The need to support small and medium-size en terprises (SMEs) has been emphasized in the 
Government's industrialization strategy.77  An SMEs Policy Unit has been  established at the Ministry 
of Enterprise Development, Industrial Policy and In vestment Promotion to help SMEs get installed 
and develop their businesses.  Industrial parks are bei ng created in the rural areas to cater to SMEs.  
The Export Development Board implements special  programmes to support e xport-oriented SMEs.  
Under the Inland Revenue Act, tax incentives are also  provided to small-scale infrastructure facilities 
engaged in, inter alia , power generation, tourism and recreation, warehousing and cold storage, 
and construction of houses and hospitals .   
                                                      
77 A small-scale enterprise is defined as one with fixed assets not exceeding Rs 20 million;  and a 
medium-size enterprise is defined as one with fixed assets above Rs 20 mi llion but not exceeding Rs 50 million.  S/WPGR/W/25/Add.4 
 Page 41 
 
 
 P. 60, para.110  
 In emergency situations the Government may offer relief packages.  For instance, in 2001 a 
relief package was offered to the hotel and tourist industry  to cover for temporary losses incurred 
after a terrorist attack on the international airpor t.  The industry was granted a moratorium on the 
repayment of capital and interest from 1 August 200 1 until 31 March 2002;  the moratorium could be 
extended on a case-by-case basis.  Other relief me asures adopted during 2001 included removal of a 
1% turnover tax on banking and finance;  remova l of import duties on essential raw materials;  
reduction of import duty on bagged cement to 15% a nd bulk cement to 10%;  reduction of interest 
rates on loans in foreign currency to 6%;  and the allocation of Rs 1 billion for drought relief.78  
P. 106, para. 115-116  
 Passenger bus services  are provided by private operators and state-owned regional transport 
companies (RTCs, also called cluster bus compan ies) under the Central Transport Board.  RTC 
services account for about one third of the comm uter bus market.  RTCs are poorly managed and 
over-staffed (over 40,000 staff fo r 5,000 operating buses).  Their operating losses rose by 55% in 
2001, but fell by 9% in 2002, to Rs 2.2 billion.  Government subsidies to RT Cs totalled Rs 1.2 billion 
in 2002.79  Private bus operators are disadvantaged by sm all operations and low government-set fares.  
A new bus-fare policy for private and public operato rs, adopted in 2002, replaced the ad hoc fare 
revisions with annual reviews using an  improved cost-based pricing formula.80  However, the 
Government directed RTCs not to adopt the 15% fare increase recommended by the National 
Transport Commission (NTC), the national trans port regulator, from July 2002.  The regulatory 
regime for bus transport remains fragmented with  overlapping responsibilities vested in provincial 
Councils and the NTC (National Transp ort Commission Act No. 37 of 1991).  
 The Government is establishing private-public partnership arrangements (PPPA) in RTCs to 
improve efficiency.  In 2002, the Public Enterprises Reform Commission (PERC) invited investors to acquire 39% equity in and to manage RTCs.  Th ey are expected to inje ct extra funds through 
government-guaranteed debt financing, main tain existing employees on no worse terms and 
conditions, and provide public ser vices under government supervision, all in return for state 
subsidies.
81  As a result of low interest in RTCs, divestment was postponed.  Six RTCs were to have 
been divested to a private consortium in 2003.  However, following court action, Cabinet withdrew 
this award and the PERC is calling for new tenders for all 13 RTCs. 
P. 108, para. 125  
 The BOI supports tourism  with tax incentives (Chapter III(3)).  Tourism on the east coast, 
which was closed in 1987 for security reasons, re-ope ned in 2002.  The Govern ment has established a 
concessional loan facility of up to Rs 50 million to help  hotels in the Trincomalee district to refurbish. 
 
__________ 
 
 
                                                      
78 Ministry of Finance (undated). 
79 Rs 225 million was also paid to subsidize bus travel by school children and Rs 300 million to fund 
bus services on uneconomic rural routes. 
80 Cost components of the formula are fuel (27%), crew (22%), repairs (12%), service, lubricants, tyres, 
and tubes (11%), depreciation (10%), finance costs and risk (10%) and overheads (8%).  Interim fare increases are possible when diesel prices rise rapidly. 
81 Government guarantees are limited to 30% of the investor's purchased equity.