G/SCM/N/299/VCT  
 
19 January 2017  
(17-0367) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES  
FINAL TRANSPARENCY N OTIFICATION (FOR 201 5) PURSUANT TO THE  PROCEDURES  
IN THE GENERAL COUNC IL DECISION IN DOCUM ENT WT/L/691  ON THE  
EXTENSIONS UNDER SCM  ARTICLE 27.4 OF THE TRANSITION  
PERIOD FOR THE ELIMI NATION OF EXPORT SUB SIDIES  
SAINT VINCENT AND  THE GRENADINES  
The fo llowing communication , dated 5 December 2016, 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 o r identif ication 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 J anuary 2015 to 31 December  2015. 
 
3. Policy objectiv e and/or purpose of the subsidy  
 
The objectives and/or purpose of the subsidy are 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 legisl ation 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 1 991. 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  
 
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;  
 Exemptio n of income tax,  
 Exemption of income tax on export profits by way of tax credits.  G/SCM/N/299/VCT  
 
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  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, i f 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 Economic 
Planning, Sustainable Devel opment 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 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 o nce the  Tax holiday 
period has expired. This 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 t he 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 mo re of the entire prof it 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 t han 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  
 
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 n ot possible, a full explanation  
 
The level of subsidies granted under the Fiscal Incentives Act in 2015 was $8,991,010  
 
8. Duration of the subsidy and/or any other time limits attached to it including  date of 
inception/commencement  
 
Please see "6" above.  
 G/SCM/N/299/VCT  
 
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  9. Statistical data permitting an assessment of t he 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, releva nt 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 re presentative year, which, where possible and m eaningful, 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$)  
2014 997,63 1,280  100,379,746  19,307,303  
2015 878,324,433  112,679,744  10,316,293  
 
Year Total Exports by Firms Benefiting From Fiscal Incentives (EC$)  
2014 32,845,255  
2015 83,757,593  
 
Please note that these figures represent total exports and imports for the perio d. 
 
Action taken to inform beneficiaries that said export subsi dies will not be provided 
after  2016  
 
 Current beneficiaries were informed of the phasing out of the export subsidy 
programme. Beneficiaries were also informed of the required commitment necessa ry to 
have the programme compliant with international trade obligations, along with all the 
accompanying changes to the current legislation.  
 Saint Vincent and the Grenadines is committed to the process of the elimination of the 
export subsidy programme. A  review of the existing legislation is underway, and it is 
envisaged that within the first half of 2017 new legislative amendments should be in 
place which would remove the non -compliant measures within the existing Fiscal 
Incentive Act and the Company 's Act. 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 effecti veness of incentive scheme.  
 
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