G/SCM/N/299 /DMA  
G/SCM/N/315 /DMA  
 
24 April 2018 
(18-2577) Page: 1/5 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1   
OF THE GATT 1994 AND  ARTICLE 25 OF THE AG REEMENT   
ON SUBSIDIES AND COU NTERVAILING MEASURES  
TRANSPARENCY NOTIFIC ATION CONCERNING THE  EXTENSIONS PROVIDED FOR IN ARTICLE 27.4 
OF THE AGREEMENT ON SUBSIDIES AND COUNTE RVAILING MEASURES OF  THE TRANSITION 
PERIOD FOR THE ELIMI NATION OF EXPORT SUBSIDIES , GRANTED PURSUANT T O 
THE PROCEDURES IN THE GENERAL C OUNCIL DECISION WT/L /691 
DOMINICA  
The following communication, dated 23 April 2018, is being circulated at the request of the 
Delegation of Dominica . 
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The attached, as per paragraph 1(c) and 2(a) of the General Council Decision of 27 July 2007 and 
the format for extension as stated in paragraph 2(a) of WT/L/691, is the updating notification in 
respect of programmes for which an extension of the transition period was granted for 2007.  
 
The legislation underlying the notified programmes has n ot changed and was submitted previously 
dated 25 February 2002.  
 
It should be noted that not all elements of the notified programmes/relevant legislation, including 
subsidies provided there under, necessarily involve export subsidies.  
 
1. Title of the subsidy  programme, if relevant, or brief description or identification of the 
subsidy  
The Fiscal Incentives Programme is directed at encouraging investment in industry through tax 
holidays, import duty and consumption tax waivers and exemptions of withholding tax es. 
 
2. Period covered by the notification  
Programme status as at 30 June 2017  
Statistical information – January 1996 - June 2015  
 
3. Policy objective and/or purpose of the subsidy  
The objective of the programme is to promote, encourage and develop industry in Dominica for 
increased employment, exports, and economic growth.  
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  4. Background and authority for the subsidy (including identification of the legislation under 
which it is granted ) 
Background  
 
For the past several decades the Government of Dominica considers  it a priority to create the 
necessary conditions for encouraging investment of national and foreign capital.  This has been and 
continues to be a critical part of the economic diversification thrust.  The aim is to achieve a 
transition and reorientation of the economy away from dependence on one agricultural crop and 
preferential access to market.  
 
Authority  
 
The Fiscal Incentives Act No. 42 of 1974 as amended by Act No. 11 of 1983.  
 
5. Form of the subsidy (i.e. grant, loan, tax concession, etc .) 
The Fiscal Inc entives Act provides for the granting of tax concessions during a period called the tax 
holiday period as follows:  
 
 Exemption from the payment of customs duties on plant, equipment, machinery, spare 
parts, raw materials, or components thereof for;  
 Construc ting, altering, reconstructing or extending the enterprise;  or 
 Equipping such enterprise for the purpose of manufacturing a product.  
 Exemption from the payment of income tax.  
The Act also provides for exemptions from the payment of income tax on export profits by way of 
tax credits.  
 
6. To whom and how the subsidy is provided (whether to producers, to exporters, or others; 
through what mechanism; whether a fixed or fluctuating amount per unit; if the latter, how 
determined .) 
Exemption from customs duties du ring a tax holiday period is granted to any enterprise for which 
there is at least 10 per cent local value added of the amount realized from sales.  The length of the 
tax holiday period is determined as follows:  
 
 Group 1 enterprises, in which local value added is 50 per cent of more of sales:  up to 
15 years;  
 Group 2 enterprises, in which local value added is between 25 -50 per cent of sales:  
up to 12 years;  
 Group 3 enterprises, in which local value added is between 10 -25 per cent of sales:  
up to 10 years;  
 Enclave1 enterprises:  up to 15 years;  
 Capital -extensive enterprises, in which there is investment of not less than 
US$10  million:  up to 15 years.  
Exemption from income tax on export profits are granted for up to five years to any enterprise if 
the following  applies:  
 
 Export profits amount to 10 per cent or more of the entire profits of the enterprise;  
 Export profits accrue from an approved product;  
                                                
1 Being an enterprise producing exclusively for export to countries other than CARICOM Members.  G/SCM/N/299/DMA • G/SCM/N/315 /DMA  
 
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   The enterprise is not already benefiting from exemptions during a tax holiday period as 
indicated above;  and 
 The enterprise engaged in a non -traditional industry exporting a product not traditionally 
exported from Dominica.  
The percentage of the tax credit is in accordance with the table below.  
 
Amount of export profits expressed as a 
percen tage of the entire profi ts 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 formula (E x 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 (indicating, if possible, the average subsidy per unit in the 
previous year). Where provision of per unit subsidy information (for the year covered by the 
notification, for the previous year, or both) is not possible, a full explanation .  
Between 1995 and 2007, only one manufacturing e nterprise received income tax credits on export 
profits.  In 1995, EC$564.547 worth of tax credits were granted, in 1996 EC$634.583, in 1997 
EC$444.000, in 1998 EC$711.704, in 1999 EC$567.922, in 2000 EC$431.659, in 2001 EC$60.948, 
in 2002 EC$159.986, in 20 03 EC$213.108, in 2004 EC$274.000, in 2005 EC$813.000, 
EC$ 1,605,866 in 2006 and EC$ 701,886 in 2007, in 2008 no income tax credits on export profits 
were received, in 2009 Export Credits amounted to EC $ 327, 768, in 2011 – 2012 Export Credits 
amounted to E C$ 1,606, 910, in 2012 – 2013 perceived  Export Credits amounted to 
EC$ 1,788,542; in 2013 -2014 perceived  Export Credits amounted to EC$ 1,141, 502 
(preliminary).  As of January 2015, Export Credits are no longer granted by Dominica.  
 
8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement . 
Administratively, tax credits on export profits are no longer granted by Dominica.  The incentives 
discontinued as of January 2015.  Under Section 109 of the Income Tax Ac t, the Dominica Coconut 
Product was granted a forty percent (40%) tax relief on total profit by way of tax credits for 
five (5) years starting 12 January 2012 and ending on 12  January  2017. 
 
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 notifying Member.  To the 
extent possible, relevant and/or determinable, however, it is desirable that such information 
include statistics of production, consumpt ion, imports and exports of the subsidized 
product(s) or sector(s) : 
a. For the three most recent years for which statistics are available;  
For a previous representative year, which, where possible and meaningful, should be the latest 
year preceding the introd uction of the subsidy or preceding the last major changed in the subsidy.  
 
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  Year Tax Credits 
Granted on 
Exports 
EC$'000  Production 
EC$'000  Export of 
Subsidized 
Products 
EC$'000  Imports of 
Subsidized 
Products EC$'000  Total Exports 
EC$'000  Total imports 
EC$'000 
1996 635 N/A 53,847  4,224  138,537  358,683  
1997 444 N/A 53,327  4,100  141,258  363,292  
1998 833 59,184  72,494  1,337  167,453  356,992  
1999 568 41,684  64,164  3,313  150,448  373,215  
2000 432 36,818  61,789  2,907  144,673  400,952  
2001 61 33,399  55,589  1,865  118,026  355,022  
2002 160 32,125  48,934  1,623  115,192  314,048  
2003 213 17,771  28,336  271 108,002  345,449  
2004 274 39,468  50,233  3,667  111,749  392,031  
2005 813 40,408  26,929  641 112,859  447,761  
2006 1606*  40,217  53,036  *991 111,976  450,619  
2007 702 41,961  26,653  *1,473  *95,826  *528,634  
2008 0 35,707  N/A *2,353  102,958  *666,952  
2009 328 27,795  27,581  2,250  86,326  607,780  
2010 N.A N.A N.A 452,259  14,634  *157,173  
2011 1,607 30,434 30,706 1,314  69,195 592,160 
2012 1,789  36,515  37,205  1, 228  *78,707 525,982  
2013 1,141**  35,224 30,063 *2,265,606 *81,183,460 *618,287, 128 
2014 N/A 33,503,599  33,860,275  2,510,484 **77, 305, 978 645, 499, 802 
2015 N/A N/A N/A N/A N/A N/A 
*  Revised figure.  
** Preliminary estimates . 
 
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  DOMINICA’S ACTION PL AN IN ACCORDANCE WITH THE DECISION OF THE GENE RAL 
COUNCIL (WT/L/691)  
 
A. Description of Programme – Fiscal Incentives Act No 42 of 1974  
The Fiscal Incentives Programme is directed at encouraging investment in industry through tax 
holidays, import duty and consu mption tax waivers and exemptions of withholding taxes.  
 
B. Description of domestic procedures necessary to eliminate export subsidies:  
The Fiscal Incentives Act is in the process of being reviewed and amended to remove the export 
contingent content within  its ambit. These amendments will allow for the emergence of a new 
Investment Policy proposing alternative regimes for subsidies/assistance.  
 
C.  Description of actions that have been, or are in the process of being undertaken:  
 
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 of action for 
implementing the decision on the extension of Article 27.4 programmes.  
In 2008 - 2009, with the assistance of TradeCom, the OECS contracted the services of a trade 
attorney and legislative drafter  to assist MS with the implementation of WTO, CSME and EPA 
commitments.  This included the review of legislation pertaining to fiscal incent ive programmes 
including those notified to 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 comment.  
The proposed legislation is intended to stream line the administration of incentive 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.  
 
Contingent on instru ctions from the Honourable Minister for Trade a fruitful consultation was held 
with the Managing Director of the single beneficiary Colgate Palmolive formally Dominica Coconut 
Products (DCP). He was formally informed of Dominica’s obligation to phase out a ll export and 
local content contingent subsidies by 2015. The Government representatives from the Division of 
Trade held discussions with the Corporate Finance Team of the beneficiary company all in an effort 
to introduce a revised and conclusive alternati ve WTO compatible programme to mitigate the 
effects of the phasing out of the relevant subsidy programme.  
 
Under Section 109 of the Income Tax Act, the Dominica Coconut Product was  granted a forty 
percent (40%) tax relief on total profit by way of tax credits for five (5) years starting 12 January 
2012 and ending on 12 January 2017.  
 
The company Dominica Coconut Products (Colgate Palmolive) is no longer a functional entity in 
Dominic a; no other company is therefore benefitting from tax reliefs on total profits since the 
tenure granted to the company expired on the 12th day of January, 2017.  
 
D.  Description of future actions:  
 
In order to address the legislative issues of these tax br eaks (Export Contingent 
Subsidies), the Government of Dominica, in an effort to review the Fiscal Incentives Act 
No. 42 of 1974 as amended by No. 11 of 1983, has mandated the creation of a 
sub-committee to deal with the review of the existing Act.  This pro cess is still ongoing. 
The Invest Dominica Authority (IDA), which implements the provisions of the Fiscal 
Incentives Act, has indicated that the completion of the Review is a priority item of the 
Authority for the Fiscal Year 2018/2019.   
The idea is to ens ure that the content of the reviewed legislation is compatible with the 
WTO rules and disciplines; we anticipate that the Review will be completed within the 
next Eight (8) month (all things remaining constant).  
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