WORLD TRADE  
ORGANIZATION  G/SCM/N/211/VCT 
8 July 2010 
 (10-3759) 
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  
 
SAINT VINCENT AND THE GRENADINES 
  
 The following notification, dated 8 July 2010, 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 July 2009 to 30 June 2010.    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 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 its legal b asis in the Fiscal Incentives Act 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.   
 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; G/SCM/N/211/VCT 
Page 2  
 
  • 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 fixed su m 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 Telecommunications, Science, Technology and Indust ry.  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 into  five (5) categories as follows:   
 
I. Group I Enterprises, up to 15 years, in which local value added is 50 per cent or more of 
sales;   
II. Group II Enterprises, up to 12 years, in which local value added is between 25 per cent 
and 50 per cent; 
III. Group 111 Enterprise, up to 10 years, in which local value added is between 10 per cent 
and 25 per cent;  
IV. Enclave Enterprises, up to 15 years, in which production is exclusively for export;  and 
V. Capital Intensive Enterprises, up to 15 years, if  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 exports of the approve d products.  Relief is pr ovided 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 y ears immediately following the expiration of the tax 
holiday period.  Relief is granted if export profits am ount to ten per cent or more of the total profits of 
an approved enterprise in accord ance with the following:   
 
Amount of export profits 
expressed as a percentage of the 
entire profits Maximum percentage of 
tax relief 
10% or more but lass 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/211/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 2009 was $5,126,000.06.   
 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 
includes statistics of production, consumption, im ports and subsidized product(s) or sector(s).   
 
a) For the two (2) 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 the subsidy or preceding the last major 
change in the subsidy.   
 
Year Total Imports (EC$) Total Exports (EC$) Total Re - Exports 
(EC$) 
2008 994,494,418.91 108,798,439.43 25,939,901.36 
2009 893,151,051.46 93,149,485.04 26,903,808.84 
 
 Please note that these figures represent total exports and imports for the period.   
 
Year Total Exports by Firms Benefiting  
From Fiscal Incentives (EC$) 
2008 53,391,792.71 
2009 57,470,163.26 
 
  G/SCM/N/211/VCT 
Page 4  
 
  PROPOSED OUTLINE FOR PREPARATION OF ACTION 
PLANS IN ACCORDANCE WITH THE DECISION 
OF THE GENERAL COUNCIL (WT/L/691) 
 
a) Description of the Programmes. Fiscal Incentives Act No. 5 of 1982 amended by 
Act 20 of 1987 and Act 16 of 1991. 
 
b) Description of the domestic procedures 
necessary to eliminat e export subsidies. Repeal of Act;  replacement with WTO consistent 
legislation. 
 
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 Comm onwealth Secretariat 
undertook to outline a plan for implementing the decision in the extension of Article 27.4 programmes. 
 
During 2008-2009, with th e assistance of Tradecom, 
the OECS Secretariat contr acted the services of a 
Trade Attorney and Legisl ative Drafter to assist 
Member States with the implementation of WTO, CSME and EPA commitments.  
 
In June 2009, the Consultant prepared model legislation and drafting guidelines re - New Business 
Development Investment Policy  
 
The proposed legislation is intended to streamline the 
administration of incentives programmes, provide equal treatment of local and foreign investors, increase 
transparency and establis h a monitoring mechanism 
for assessing the applicat ion and effectiveness of 
incentive schemes. 
 
A taskforce was established to review draft Legislation.  
 
Notification of beneficiaries by Minister's press release on phase out of Fi scal Incentives by 2015. 
 
Consultation with Stakeholders on new regime.  
d) Description of future actions. Implementation of a new Business Development 
Investment Policy where the new Legislation will 
form part:  This policy should be operational by the end of 2010. 
 
 
 
 
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