G/SCM/N/253/VCT  
G/SCM/N/260/VCT  
 
7 October 2013  
(13-5387)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1  
OF THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES 
TRANSPARENCY NOTIFICATION CONCERNING THE EXTENSIONS PROVIDED FOR IN ARTICLE 27.4 
OF THE AGREEMENT ON SUBSIDIES AND COUN TERVAILING MEASURES OF THE TRANSITION 
PERIOD FOR THE ELIMINATION OF EXPORT  SUBSIDIES, GRANTED PURSUANT TO 
THE PROCEDURES IN THE GENERA L COUNCIL DECISION WT/L/691 
SAINT VINCENT AND THE GRENADINES  
The following communication, dated 3 October 2013, is being circulated at the request of the 
Delegation of Saint Vincent and the Grenadines. 
 
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 The attached is the new and full notification of Saint Vincent and the Grenadines under 
Article XVI:1 of GATT 1994 and Article 25 of th e Agreement on Subsidies and Countervailing 
Measures ("the Agreement").  We also submit this notification for purposes of transparency in the context of the extension 
granted to Saint Vincent and the Grenadines under Article 27.4 of the Agreement, pursuant to the 
procedures in WT/L/691.  
1. Title of the subsidy programme, if relevant, or brief description or identification to be 
provided 
 Fiscal Incentives Act No.5 of 1982 amen ded 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 July 2012 to 30 June 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 wa s passed to give effect to an agreement on 
the harmonization of fiscal incentives to industry among CARICOM  countries. G/SCM/N/253/VCT • G/SCM/N/260/VCT 
 
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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 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 amen ded 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 111 Enterprise, 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 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 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% 
 G/SCM/N/253/VCT • G/SCM/N/260/VCT 
 
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  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 
 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 under the Fiscal Incentives Act in 2013 was $10,874,062. 
 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 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).  
For the three (3) most recent years for which statistics are available;  
 For a previous representative year, which, wher e 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 653,513,942 72,415,939 8,641,076 
 
Year Total Exports by Firms Benefiti ng From Fiscal Incentives (EC$) 
2012 75,872,321 
2013 54,348,200 
Please note that these figures represent total exports and imports for the period. 
 
10. Action taken to inform beneficiaries 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 Tr ade 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 schemes. G/SCM/N/253/VCT • G/SCM/N/260/VCT 
 
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   In 2011, Private Sector Consultation was held where beneficiaries were informed of the 
phasing out of the export subsidy programme. Beneficiaries were also informed of the required commitment necessary to have the programme compliant with international trade obligations, along with all the accompanying changes to the current legislation. 
 
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