WORLD TRADE  
ORGANIZATION  G/SCM/N/186/VCT 
21 June 2010 
 (10-3373) 
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  
 
SAINT VINCENT AND THE GRENADINES 
  
 The following communication, dated 20 May 2010, is being circulated at the request of the 
Delegation of Saint Vincent and the Grenadines.    
_______________ 
 
 
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 2008 to 30 June 2009.   
 
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 diversification in traditional 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 programme finds it's legal basis in the Fiscal In centives 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/186/VCT 
Page 2  
 
   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 tax concession by way of the following:   
 
 - Exemption of import duties, consumption ta xes 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 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 Telecommunication, Science, Technology 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 amended 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 15 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 Enterprises, 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 it's exports of the appr oved 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 y ears 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 profits 
of the enterprises in accordan ce with the following:   
  G/SCM/N/186/VCT 
 Page 3 
 
 
  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 
 
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 2008 was EC$ 9,192,584.18.   
 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 statis tics 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 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 
 
 Please note that these figures represen t total exports for the period.   
 
Year Total Exports by Firms Benefiting From 
Fiscal Incentives (EC$) 
2008 53,391,792.7 
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