G/SCM/N/284/KNA, G/SCM/N/290/KNA  
G/SCM/N/299/KNA, G/SCM/N/315/KNA  
 
13 July 2018 
(18-4403) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFICATION PU RSUANT TO ARTICLE XV I:I OF 
THE GATT 1994 AND  ARTICLE 25 OF THE AG REEMENT ON  
SUBSIDIES AND COUNTE RVAILING 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 
ST. KITTS AND NEVIS 
The following communication, dated 10 July 2018, is being circulated at the request of the 
Delegation of St. Kitts and Nevis.  
 
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1. Title of the programme  for which extension is requested pursuan t to procedures in 
G/SCM/39  
 
The Fiscal Incentive s Act No. 17 of 1974.  This is an Act to provide incentives to industry.  
 
2. Period covered by the notification  
 
The programme description is as of 30 May 2018 and is identical to that as of 1  September 2001.  
 
3. Policy objective and/or purpose of the subsidy  
 
The objective of this programme is to stimulate export performance, support investment, promote 
economic activity, and promote diversification in traditional and non -traditional products.  
 
4. Background and authority for the subsidy  
 
Background  
 
The Government of St. Kitts and Nevis considers that appropriate conditions for encouraging 
foreign direct investment are to be promoted in order to ensure the economy remains in a viable 
position.  
 
Authority  
 
Fiscal Incentive s Act (St. Kitts -Nevis -Anguilla) , No. 17 of 1974 . 
 
5. Form of the Subsidy  
 
The subsidy takes the form of a tax exemption.  
 G/SCM/N/284/KNA • G/SCM/N/290/KNA • G/SCM/N/299/KNA • G/SCM/N/315/KNA  
 
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  6. To whom and how the subsidy is provided (whether to producers, exporters or others), 
through what mechanisms, (whe ther it is a fixed sum or fluctuating amount per unit), and if 
the latter, how is it determined ? 
 
The main beneficiaries of the fiscal incentives scheme are manufacturing and agro -processing 
enterprises. The incentive scheme is managed by the Ministry of I nternational Trade, Industry, 
Commerce and Consumer Affairs. Applications for incentive benefits are submitted to the 
aforementioned Ministry, which recommends to Cabinet the level and type of concessions to be 
granted.  
 
The Fiscal Incentives Act allows fo r the granting of a corporate ta x holiday of up to fifteen 
(15) years, for the manufacture of approved products by approved enterprises. The duration of 
these concessions is in accordance with the local value added generated. In this respect, the Act 
classifies these approved enterprises as follows:  
 
i. Group I  enterprises, where the local value added is 50% or more of sales, may enjoy 
a tax holiday of up to 15 years;  
ii. Group II  enterprises, where the local value added is between 25% and 49% of sales, 
may enjoy a tax holiday of up to 12 years;  
iii. Group III enterprises, where the local value added is between 10% and 24% of 
sales, may enjoy a tax holiday of up to 10 years;  
iv. Enclave enterprises , where production is exclusively for export, may enjoy a tax 
holiday of up t o 15 years.  
Where an approved enterprise is engaged in a highly capital intensive industry it may receive 
some benefit for a period of up to 15 years.  
 
The Act also grants import duty exemptions for machinery, equipment and spare parts, building 
materials,  raw materials and others, as appropriate to be used in eligible enterprises.  
 
The Fiscal Incentives Act No. 17 of 1974 further provides for corporate tax relief under certain 
circumstances once the tax holiday period has expired. The relief is contingent on export 
performance. It is granted on the export profits of an enterprise accruing from the export of its 
approved product(s). Relief is provided for non -traditional exports to all countries; however, in the 
case of exports to Guyana, Jamaica and Trinida d and Tobago, the period of relief is of only five (5) 
years immediately following the expiration of the tax holiday period.  
 
(Schedule II part two of the Act attached explains the method of calculating export allowance)  
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual 
budgeted amount for this subsidy (indicating, if possible, the average subsidy per unit in the 
previous year). Where provision per unit subsidy information (for the year covered by the 
notification , for the previous year or both) is not possible a full  explanation should be 
provided  
 
Given the nature and coverage of the programme there are no statistics available which reflect the 
amount of the subsidy per unit. Further, there is no provision in our  annual budget to determine 
the amount of funds allocated to this form of benefit provided for approved enterprises because of 
approved assistance is revenue foregone.  
 
8. Duration of the subsidy  
 
The duration of the subsidy as currently applied is subject  to St. Kitts and Nevis ' rights and 
obligations under the WTO Agreements and in particular, the SCM Agreement.  
 
9. Statistics on the impact of the programme  
 
The following table illustrates the total value of St. Kitts and Nevis ' foreign trade with world 
partners on all commodities during the period 200 0-2017. G/SCM/N/284/KNA • G/SCM/N/290/KNA • G/SCM/N/299/KNA • G/SCM/N/315/KNA  
 
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Value (EC$ millions) of St. Kitts -Nevis ' Foreign Trade wit h World Partners for the 
period  2000-2017 
 
Year Imports  Exports  Re-Exports  
2000 529.1  78.8 9.7 
2001 510.5  77.5 6.3 
2002 544.6  94.8 10.6 
2003 538.9  101.8  9.5 
2004 493.4  101.1  8.2 
2005 568.3  81.0 12.5 
2006 673.7  95.7 11.7 
2007 737.3  85.5 7.3 
2008 877.0  116.1  23.6 
2009 739.7  83.2 31.3 
2010 731.7  71.9 16.6 
2011 669.7  91.8 31.8 
2012 754.2  109.0  28.6 
2013 814.9  94.1 28.1 
2014 841.5  92.1 29.5 
2015 1644.5  118.1  16.2 
2016 951.1  91.2 11.2 
2017 748.5  86.1 7.8 
Source    St. Kitts & Nevis Customs & Excise Department  
 
10. Transparency Provisions  
 
As in previous years, St. Kitts and Nevis continued its policy of adopting a sub -regional approach 
to amending the legislation to make it compatible with the Agreement on Subsidies and 
Countervailing Measures. This is will be instrumental  for the continued  development of harmonized 
policies under the Economic Union among the members of the Organi sation of Eastern Caribbean 
States (OECS).  
 
The objective of the work being undertaken in this regard is to reform the areas of the legislation 
that are incompatibl e with the SCM Agreement.  
 
Beneficiaries of the subsidy are currently  working with the Ministry of International Trade, 
Industry, Commerce & Consumer Affairs and the Ministry of Legal Affairs to reform the Fiscal 
Incentives Act.  
 
 
 
 
 
 G/SCM/N/284/KNA • G/SCM/N/290/KNA • G/SCM/N/299/KNA • G/SCM/N/315/KNA  
 
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  ATTACHMENT I  
 
SCHEDULE I 
 
MEMBER STATES  
(a) Antigua  Jamaica  
Barbados  Montserrat  
Belize  St. Kitts/Nevis/Anguilla  
 Dominica  St. Lucia  
Grenada  St. Vincent  
Guyana  Trinidad & Tobago  
 
(b) any other State of the Caribbean region that becomes a member of the Common Market.  
 
 
SCHEDULE II  
 
PART I  
 
EXPORTS TO THE FOLLO WING TERRITORIES ARE   
NOT ELIGIBLE FOR EXP ORT ALLOWANCE  
(c) Antigua  Jamaica  
 Barbados  Montserrat  
 Belize  St. Lucia  
 Dominica  St. Vincent  
 G/SCM/N/284/KNA • G/SCM/N/290/KNA • G/SCM/N/299/KNA • G/SCM/N/315/KNA  
 
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  PART II 
 
METHOD OF CALCULATIN G EXPORT ALLOWANCE  
1. An export allowance set off for the purposes of section 16 shall be calculated as follows:  
 
Export profits as a percentage   Rebate of income tax as a  
of total profits  percentage of income tax on  
 export profits  
 
10 but under 21  25% 
21 but under 41  35% 
41 but under 61  45% 
61 and  over 50% 
 
2. for the purposes of calculation – 
 
(a) export profits as a percentage of total profits  "shall be deemed to be export sales as a 
percentage of total sales ". 
 
(b) profits attributable to exports shall be taken to be the amount resulting from th e 
formula p x e  where – 
  s 
 
(i) "p" represents the chargeable profit of a company for its year of income  
 
(ii) "e" represents the proceeds of sales (ex -factory) of the output of a company exported 
during its year of income;  
 
(iii) "s" represents the proce eds of sales (ex -factory) of the total output of the company 
during its year of income.  
 
3. In computing the proceeds of all sales for the year of income there shall be deducted any 
excise duty paid on t he goods sold during that year.  G/SCM/N/284/KNA • G/SCM/N/290/KNA • G/SCM/N/299/KNA • G/SCM/N/315/KNA  
 
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  SCHEDULE III  
TAX HOLIDAY PERIODS  
Classification of  
Approved Enterprise  Tax Holiday Period  
Group   Years  
 
 
Group I Enterprise   15 
Group II Enterprise   12 
Group I II Enterprise   10 
Enclave Enterprise   15 
 
 
 
 
 W.F. Glasford  
  Speaker  
 
Passed in the House of Assembly thi s 17th day of April, 1974.  
 
 
E. JAMES FLEMING  
Ag. Clerk of the House of Assembly.  
 
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