WORLD TRADE
ORGANIZATIONG/SCM/N/95/VCT
G/SCM/N/99/VCT
26 August 2003
(03-4445)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
Extension Under SCM Article 27.4 of the Transition Period for the
Elimination of Export Subsidies Pursuant to the Procedures
in Document G/SCM/39
SAINT VINCENT AND  THE GRENADINES
The following communication, dated 11 August 2003, has been received from the Ministry of
Foreign Affairs, Commerce and Trade, in St. Vincent and the Grenadines.
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The attached updating notification, as per paragraph 1(b) of the procedures for extension
under SCM Article 27.4 in document G/SCM/39 and as outlined in the general rules governing
Subsidy Notifications under Article 25 of the Agreement on Subsidies and Countervailing Measuresand under Article XVI of GATT 1994, is submitted in respect of the programmes identified in the
previous notification (G/SCM/N/71/VCT).
Furthermore, in accordance with Article 25.6 of the Agreement on Subsidies and
Countervailing Measures and Article XVI:1 of the GATT 1994, the Government of Saint Vincent andthe Grenadines wishes to inform you that St. Vinc ent and the Grenadines has not introduced into its
territory any subsidy within the meaning of Article 1.1 of the Agreement which is specific within the
meaning of Article 2 of the Agreement, or which operates directly or indirectly to increase exports
from or reduce imports into its territory within the meaning of Article XVI:1 of the GATT 1994, since
the full notification circulated in document (G/SCM/N/74/VCT) was submitted.
The Ministry recognizes that the closing date for the submission of updated notifications has
elapsed and regrets the late submission.G/SCM/N/95/VCT
G/SCM/N/99/VCT
Page 2
1. Title of the subsidy programme, if relevant, or brief description or identification to be
provided
Fiscal Incentives Act No. 5 of 1982 amended by Act 20 of 1987 and Act 16 of 1991.
This is an Act to provide incentives to industry.
2. Period covered by the notification
As of 1 July 2003-30 June 2004.
3. Policy objective and/or purpose of the subsidy
The objective and/or purpose of the subsidy is  to stimulate international competitiveness,
support investment, economic activity and promote diversification in traditional and non-traditional
products.
4. Background and authority for the subsidy (including identification of the legislation
under which it is granted)
The Fiscal Incentives programme finds its legal basis in the Fiscal Incentives Act No. 5 of
1982, amended by Act No. 20 of 1987 amd Act No. 16 of 1991.  This Act was passed to give effect to
an agreement on the harmonization of fiscal incentives to industry among CARICOM countries.
Authority
- Fiscal Incentives Act No. 5 of 1982 amended by- Act 20 of 1987
- Act 16 of 1991
5. Form of subsidy (i.e. grant, loan, tax concession, etc.)
The Fiscal Incentives Act provides for tax concessions by way of the following:
• Exemption of import duties, consumption taxes on plant, equipment, machinery, spare
parts, raw materials, or components thereof,
• Exemption of income tax,
• Exemption of income tax on export profits by way of tax credits.
6. To whom and how the subsidy is provided (whether to producers, exporters or others),
through what mechanisms, whether it is a fi xed sum or fluctuating amount per unit and,
if the latter, how the amount is determined)
The main beneficiaries of the Fiscal Incentives scheme are manufacturing and agro-
processing enterprises.  This Incentive scheme is managed and administered by the Ministry ofTelecommunications, Science, Technology and Industry.  Applications for incentive benefits under
this scheme are submitted to the aforementioned Ministry, which recommends to Cabinet the level
and type of concessions to be granted.G/SCM/N/95/VCT
G/SCM/N/99/VCT
Page 3
The Fiscal Incentives Act No. 5 of 1982, as amended by Act No. 20 of 1987 and Act No. 16
of 1991, allows for the granting of tax holidays for the manufacture of approved products by approved
enterprises and can be classified into five (5) categories as follows:
(i) Group I Enterprises , up to 15 years, in which local value added is 50 per cent or more of
sales;
(ii) Group II Enterprises , up to 12 years, in which local value added is between 25 per cent and
50 per cent;
(iii) Group III Enterprises , up to 10 years, in which local value added is between 10 per cent and
25 per cent;
(iv) Enclave Enterprises , up to 15 years, in which production is exclusively for export;  and
(v) Capital Intensive Enterprises , up to 15 years, if there is an investment of not less than
US$25 million.
The Act provides for income tax relief in the form of tax credits to enterprises once the tax
holiday period has expired.  This relief is contingent on exportation and is granted on export profits of
an enterprise accruing from its exports of the approved products.  Relief is provided for non-traditional exports to all countries, however, in the case of exports to Guyana, Jamaica and Trinidad
and Tobago, the period of relief is only for five years immediately following the expiration of the tax
holiday period.  Relief is granted if export profits amount to 10 per cent or more of the entire profit of
the enterprise in accordance with the following:
Amount of export profits expressed as a percentage of
the entire profitsMaximum percentage of tax relief
10% or more but less than 21% 25%
21% or more but less than 41% 35%
41% or more but less than 61% 45%
61% or more 50%
Export profits is determined by the following formula:
(E*P)/S
Where
E represents proceeds from export sales
P represents profits made by the enterprise and
S represents the proceeds of all sales
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual
amount budgeted for that subsidy (indicative, if possible, the average subsidy per unit in
the previous year).  Where provision of the per unit subsidy information (for the year
covered by the notification, for the previous year, or both) is not possible, a full
explanation
The level of subsidies granted in 1995, 1996 and 1997 were EC$2,485,672, EC$2,800,609
and EC$3,120,366 respectively.G/SCM/N/95/VCT
G/SCM/N/99/VCT
Page 4
8. Duration of the subsidy and/or any other time limits attached to it, including date of
inception/commencement
Please see "6" above.
9. Statistical data permitting an assessment of the trade effects of the subsidy.  The specific
nature and scope of such statistics is left to the judgement of the Member.  To the extent
possible, relevant and/or determinable, however, it is desirable that such information
includes statistics of production, consum ption, imports and subsidies product(s) or
sector(s)
(a) For the most three recent years for which statistics are available;
(b) For a previous representative year, which where possible and meaningful,
should be the latest year preceding the introduction of the subsidy or preceding
the last major chan ge in the subsidy.
Total value of St. Vincent's exports and imports for the three most recent years:
Year Total Imports (EC$) Total Exports (EC$)
2000 440,931,045 136,593,573
2001 464,000,275 112,377,481
2002 480,156,148 106,098,073
Please note that these figures represent total exports and imports for the period.
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