WORLD TRADE  
ORGANIZATION   
G/SCM/N/243/VCT 
9 October 2012 
 (12-5454) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for 
the Elimination of Export Subsidies Pursuant to the Procedures Contained 
in the General Council Decision in Document WT/L/691 
 
Updating notification 
 
SAINT VINCENT AND THE GRENADINES 
   The following communication, dated 5 October 2012, 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 amende d 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 2011 to 30 June 2012.  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 di versification in traditio nal and non – traditional 
products.  4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted) 
 
 The Fiscal Incentives program finds it legal b asis 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.  G/SCM/N/243/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 ta x 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 am ended 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% 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  exportation and is granted on Export profits of an 
enterprise accruing from its expor ts 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 Toba go, the period of relief is only for five years 
immediately following the expiration of the tax holid ay period.  Relief is granted if export profits 
amount to ten 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% 
  G/SCM/N/243/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 subsid y 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 2011 was $7,849,476.21.   
 
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 assessmen t 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 
include statistics of production, consumption, impor ts and exports of subsidized product(s) or 
sector(s). 
  a) For the three (3) most recent y ears for which statistics are available;  
  b) For a previous representative year, whic h, 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$) 
2011 453,194,730.80 50,343,136.98 4,914,128.21 
2012 464,568,606.10 50,556,992.81 7,376,005.66 
 
Year Total Exports by Firms Benefiting From 
Fiscal Incentives (EC$) 
2011 32,356,538.67 
2012 18,321,061.49 
 
 Please note that these figures represent to tal exports and imports for the period. 
 
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. 
 G/SCM/N/243/VCT 
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   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 c ontracted 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 drafti ng guidelines that have been shared with Drafters 
and Trade Officials for their comments.  The propo sed legislation is intended to streamline the 
administration of incentives programmes, provide e qual treatment of local and foreign investors, 
increase transparency and establish a monitori ng mechanism for assessing the application and 
effectiveness of incentive schemes. 
 
  
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