. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q3/DMA/10 
G/SCM/Q4/DMA/8 18 January 2007 
 
(07-0242) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
REQUESTS PURSUANT TO ARTICLE 27.4 OF THE AGREEMENT 
ON SUBSIDIES AND COUNTERVAILING MEASURES 
 
PROCEDURES FOR EXTENSIONS UNDER  
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
 
Responses to Follow-Up Questi ons Posed by the UNITED STATES1 
  
 The following communication, dated 4 January 2007,  is being circulated at the request of the 
Delegation of Dominica.  
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DOMINICA
 
 
Fiscal Incentive Programme  
 
Q1. Are there more specific economic, financ ial and development statistics to which 
Dominica can point that demonstrate that the programmes in questions have had a positive 
impact and will continue to do so into the future? 
 
Reply  
 
 Two of the important records which are utilized as some form of measure on the benefits 
derived from granting fiscal incentives are employment  generated and investme nt levels.  In 2005, 
records show that twenty-two (22) compan ies received concessions under the fiscal incentives 
programme which translated into 148 jobs and invest ment of EC$28,996,172.  It is important to note 
that most of the enterprises benefiting from fiscal  incentives are small enterprises.  The waiver of 
import duty and other taxes assists in facilitating the investment through a reduction in initial capital 
investment.   
Q2. Has there been a formal government review of the continued need for the programmes 
in question?  If so, what were the findings? 
 Reply
 
  There has been no formal governmental review  of the continued need for the programme.   
                                                     
 
1 G/SCM/Q3/DMA/9 and G/SCM/Q4/DMA/7. G/SCM/Q3/DMA/10 
G/SCM/Q4/DMA/8 Page 2 
 
 
  Q3. Although Dominica states that there are no requirements on the use of domestic over 
imported goods, the level of benefits under th e Fiscal Incentives Progr amme appears to be 
based on the level of "local value added" (G/SCM/N/146/DMA, p. 2).  Please explain. 
 Reply
 
  The Fiscal Incentives Act No. 42 of 1973 is in need of updating.  A number of provisions in the Act are not applied as stated.  One of these is th e local value added provision.  In the application 
and implementation of the programme, local cont ent or local value added is not taken into 
consideration in determining whether to grant incen tives or for how long.  The Act will be updated as 
part of the CARICOM new investment regime under the CSME. 
Q4. Dominica states that the Fiscal Incentives Act provides companies a tax holiday of up to 
15 years.  If an extension is granted, what step s will Dominica take to ensure that the benefits 
under these programmes will not exceed the suggested 2018 extension request? 
 
Reply
 
  Dominica will ensure that no new applicants  are granted fiscal incentives with an export 
subsidy component which exceed 2018. 
Q5. If any additional extension is granted, wo uld new applicants be accepted or would the 
extension period be used to phase out the s ubsidies for the existing beneficiaries?   
 
Reply
 
  Steps will be taken to ensure that the e xport subsidy component of the fiscal incentives 
programme is removed by 2018. 
Q6. Can Dominica please explain why the eligibility criteria for "Enclave"
2 enterprises 
differ  from those enterprises, which do export CARICOM members? 
 
Reply  
 
 The Fiscal Incentives Act No. 42 of 1973 is in need of updating.  A number of provisions in 
the Act are not applied as stated.  One of these is the provision relating to enclave enterprises.  The 
provisions relating to enclave enterprises are not ap plied in the granting of fiscal incentives by the 
implementing agency.  The Act will be updated as part of the CARICOM new investment regime 
under the CSME.  
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2 Being an enterprise producing exclusively for e xport to countries other than CARICOM Members.