G/SCM/N/284/VCT  
G/SCM/N/290/VCT  
 
2 October 2015  
(15-5100)  Page: 1/3  
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 28 September 2015, 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 January 2014 to 31 December 2014.  
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/284/VCT • G/SCM/N/290/VCT 
 
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  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 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/284/VCT • G/SCM/N/290/VCT 
 
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  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 2014 was $8,678,576.01   
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). 
 
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 th e subsidy or preceding the last major change 
in the subsidy. 
Year Total Imports (EC$) Total Exports (EC$) Total Re-Exports (EC$) 
2013 773,086,822 112,298,123 15,913,231 
2014 997,631,280 100,379,746 19,307,303 
 
Year Total Exports by Firms Benefiti ng From Fiscal Incentives (EC$) 
2013 81,200,998 
2014 32,845,255 
 
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 
 
 Current 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.  
 Saint Vincent and the Grenadines is committed to the process of the elimination of the 
export subsidy programme. As such it is envisaged that by December 2015 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 foreig n investors, increase transparency and 
establish a monitoring mechanism for assessing the application and effectiveness of 
incentive scheme. 
 
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