G/SCM/N/275/VCT  
 
20 August 2014  
(14-4808)  Page: 1/3  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
TRANSPARENCY NOTIFICATION CONCERNI NG THE EXTENSIONS  PROVIDED FOR  
IN ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING  
MEASURES OF THE TRANSITION PERIOD FOR THE ELIMINATION OF EXPORT  
SUBSIDIES, GRANTED PURSUANT TO THE PROCEDURES IN THE  
GENERAL COUNCIL DECISION WT/L/691 
SAINT VINCENT AND THE GRENADINES  
The following communication, dated 19 August 2014, is being circulated at the request of the 
Delegation of Saint Vincent and the Grenadines.  
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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 amended by Act 20 of 1987 and Act 16 of 1991. 
 
This is an Act to provide incentives for industry at development.  2  PERIOD COVERED BY THE NOTIFICATION 
As of 1
st January 2013 to 31st December 2013. 
 3  POLICY OBJECTIVE AND/OR PURPOSE OF THE SUBSIDY 
The objectives and/or purpose of the subsidy ar e 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 program finds it legal basis in the Fiscal Incentives No. 5 of 1982, amended 
by Act No. 20 of 1987 and Act No. 16 of 1991. This 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. 
 G/SCM/N/275/VCT 
 
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  5  FORM OF SUBSIDY (I.E., GRAN T. LOAN, TAX CONCESSION, ETC) 
The Fiscal Incentives Act provides for tax concession 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 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 incentive scheme is managed and administered by the Ministry of Agriculture, 
Fisheries and Industry. Applications for the incentive benefits under this scheme are submitted to the aforementioned Ministry, which recommends to Cabinet the level and type of concession to be 
granted. 
 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% or more of sales; 
 
II. Group II Enterprises, up to 12 years, in which local value added is between 25% 
and 50%; 
 
III. Group III Enterprises, up to 10 years, in which local value added is between 10% 
and 25%;  
 
IV. Enclave Enterprises, up to 15 years, in which production is exclusively for export; and 
 V. Capital Intensive Enterprises, up to 15 years, in 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 is contingent on expo rtation and is granted on Export profits of an 
enterprise accruing from its exports of the ap proved 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 ten per cent or more of the entire profit of the enterprise in accordance with the following:    
Amount of export profits 
expressed as a percentage of the 
entire profits Maximum percentage of 
tax relief 
10% or more but less 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 are 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. G/SCM/N/275/VCT 
 
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  7  SUBSIDY PER UNIT, OR IN CASES WH ERE THIS IS NOT PO SSIBLE, THE TOTAL 
AMOUNT OR THE ANNUAL AMOUNT BUDGETED FOR THAT SUBSIDY (INDICATIVE, IF POSSIBLE, THE AVERAGE SUBSIDY PER UN IT IN THE PREVIOUS YEAR). WHERE 
PROVISION OF THE PER UNIT SUBSIDY INFO RMATION (FOR THE YEAR COVERED BY THE 
NOTIFICATION, FOR THE PREVIOUS YEAR OR BOTH) IS NOT POSSIBLE, A FULL 
EXPLANATION 
The level of subsidies granted under the Fiscal Incentives Act in 2013 was $6,105,151.72.   
 
8  DURATION OF THE SUBSIDY AND/OR AN Y OTHER TIME LIMITS ATTACHED TO IT 
INCLUDING DATE OF IN CEPTION/COMMENCEMENT 
Please see "6" above. 
 
9  STATISTICAL DATA PERMITTING AN A SSESSMENT OF THE TRADE EFFECTS OF THE 
SUBSIDY 
The Specific nature and scope of such statistics is left to the judgment of the Members. To the 
extent possible, relevant and/or determinable, however it is desirable that such information includes statistics of production, consumption, imports and subsidized product(s) or sector(s). 
 
a) For the three (3) most 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. 
 
Year Total Imports (EC$) Total Exports (EC$) Total Re-Exports 
(EC$) 
2012 958,196,385 102,055,211 13,113,109 
2013 773,086,822 112,298,123 15,913,231 
 
Year Total Exports by Firms Benefiting From 
Fiscal Incentives (EC$) 
2012 75,872,321 
2013 81,200,998 
 
Please note that these figures represent total exports and imports for the period.  
Action taken to inform benefi ciaries that said export subsidies will not be provided 
after 2015 
 
Please be advised of the following steps taken to inform beneficiaries that export subsidies will not 
be provided after 2015. 
  In July 2008, as a follow-up to the findings of the 2007 TPR, the OECS Member States with 
assistance from the Commonwealth Secretariat undertook to outline a plan for implementing 
the decision in the extension of Article 27.4 programmes. 
 
In 2008-2009, with the assistance of Tradecom, the OECS Secretariat contracted the services of a 
Trade Attorney and Legislative Drafter to assist Member States with the implementation of WTO, 
CSME and EPA commitments. This included those notified of the WTO. As of June 2009, the Consultant prepared model legislation and drafting guidelines that have been shared with Drafters 
and Trade Officials for their comments. The proposed legislation is intended to streamline the 
administration of incentives programmes, provide equal treatment of local and foreign investors, increase transparency and establish a monitoring mechanism for assessing the application and 
effectiveness of incentive scheme. 
 During the period 2011-2013, the process of informing beneficiaries is on-going; to date no new 
export subsidy approvals are being granted by the Cabinet of Saint Vincent and the Grenadines.   
 
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