WORLD TRADE  
ORGANIZATION  G/SCM/N/146/VCT 
4 October 2006 
 (06-4763) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Extension Under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures  
in Document G/SCM/39  
 
Updating Notification  
 
ST. VINCENT AND THE GRENADINES 
 
  The following communication, dated 3 October 2006, is being circulated at the request of the Delegation of St. 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 1st July 2004 to 30th June 2005. 
 3. Policy objective and/or purpose of the subsidy
. 
  The objective and/or purpose of the subsidy is  to stimulate, international competitiveness, 
support investment, economic activity and prom ote 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 b asis in the Fiscal Incentives No.5 of 1982, 
amended by Act No.20 of 1987 and Act No.16 of 1991.  This Act was passed to give effect to 
an agreement on the harmonization of fi scal incentives to industry among CARICOM 
countries. 
 G/SCM/N/146/VCT 
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   Authority 
  - Fiscal Incentives Act No.5 of 1982 amended by  - Act 20 of 1987  - Act 16of1991 
 
5. Form of subsidy (i.e., Grant. loan, tax concession. (etc)
. 
  The Fiscal Incentives Act provides for ta x concessions 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 (w hether to producers, exporters or others), 
through what mechanisms, whether it is a 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 ma naged and administered by the Ministry of 
Telecommunications, Science, Technology and In dustry. Applications for incentive benefits 
under this scheme are submitted to the aforementioned Ministry, which recommends to Cabinet the level and type of concessions 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 holiday s 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% an 
  50%; 
 iii. Group III Enterprises , 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 relief is con tingent 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 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 accordan ce with the following:  G/SCM/N/146/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 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  Incentive Act in 2003, 2004 and 2005 were 
EC$13,061,989.15, EC$ 12,844,269.25 and EC$ 8,274,908.87, respectively. 
 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 th e trade effects of the subsidy.  The specific 
nature and scope of such statistics is left to the judgment of the Member.  To the extent 
possible, relevant and/or determinable, howev er, it is desirable that such information 
includes statistics of production, consumptio n, imports  and subsidized product(s) or 
sector(s) . 
 
 (a) For the three most recent year s 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$) 
2003 543,340,446 102,848,155 
2004 608,507,959 98,849,001 
2005 649,426,771 106,098,073 
 
 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 4l% 35% 
41%or more but less than 61% 45% 
61% or more 50% G/SCM/N/146/VCT 
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   Please note that these figures represent to tal exports and imports for the period. 
 
 
Year Total Exports by Firms Benefiting From Fiscal Incentives (EC$) 
2003 32, 999,345 
2004 35, 469, 211 
2005 37, 883, 337 
 
 
 
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