WORLD TRADE  
ORGANIZATION  G/SCM/N/114/VCT 
7 July 2004 
 (04-2919) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
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  
 
Updating Notification  
 
SAINT VINCENT AND  THE GRENADINES 
 
  The following communication, dated 25 June 2004,  is being circulated at the request of the 
Ministry of Foreign Affairs, Commerce and Trade, in St. Vincent and the Grenadines. 
 
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  The attached updating notification, as per para graph 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 Measures 
and under Article XVI of GATT 1994,  is submitted in respect of the programmes identified in the 
previous notification (G/SCM/N/99/VCT).  G/SCM/N/114/VCT 
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 1. Title of the subsidy programme, if relevant, or  brief description or identification to be 
provided 
Fiscal Incentives Act No. 5 of 1982 amende d 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 2004-30 June 2005. 
 
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 lega l 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 ta x 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 (w hether to producers, exporters or others), 
through what mechanisms, whether it is a fixed 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 Incen tive scheme is managed and administered by the Ministry of 
Telecommunications, Science, Technology and Indust ry.  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/114/VCT 
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  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 fo r the manufacture of approved products by approved 
enterprises and can be classified in to 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 va lue 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 conti ngent on exportation and is gr anted on export profits of 
an enterprise accruing from its exports of the approved products.  Relie f 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 y ears 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 accordan ce with the following: 
 
Amount of export profits expressed as a percentage of 
the entire profits Maximum percentage of tax relief 
10% or more but less 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 2001, 2002 and 2003 were EC$71,497,401.56 
EC$45,685,715.90 and EC$56,203,219.83 respectively.  G/SCM/N/114/VCT 
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 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 th e 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, howev er, it is desirable that such information 
includes statistics of production, consumpt ion, 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 change in the subsidy. 
 
 Total value of St. Vincent's exports and imports for the three most recent years: 
 
Year Total Imports (EC$ ) Total Exports (EC$) 
2001 464,000,275 112,377,481 
2002 480,156,148 106,098,073 
2003 543,614,828 102,592,682 
 
 Please note that this is not the exports bene fiting in some way under the Fiscal Incentives Act, 
but rather, total exports. 
 
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