WORLD TRADE  
ORGANIZATION   
G/SCM/N/226/VCT 
21 September 2011 
 (11-4559) 
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 19 September 2011 , 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 ame nded 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 2010 to 30 June 2011. 
 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 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 was passed to give effect to an 
agreement on the harmonization of fiscal incentives to industry among CARICOM countries.    Authority 
 
Fiscal Incentives Act No.5 of 1982 amended by   -  Act 20 of 1987  -  Act 16 of 1991 G/SCM/N/226/VCT 
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5. Form of subsidy (i.e. Gran t, loan, tax concession. etc.). 
 
 The Fiscal Incentives Act provides for ta x concession 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 (whe ther to producers, exporters or others, through 
what mechanisms, whether it is 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 managed and administered by the Ministry of Tourism and Industry.  Applications for the incentiv e benefits under this scheme are submitted to the 
aforementioned Ministry, which recommends to Cabi net the level and type of concession to be 
granted. 
 
 The Fiscal Incentives Act No.5 of 1982, as amende d by Act No.20 of 1987 and Act.  No.16 of 
1991, allows for the granting of tax holidays for the manufacture of approved products by approved 
enterprises and can be classified in to 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 whic h local value added is between 25% and 
50%;   
III. Group 111 Enterprise, 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 is contingent on exportation and is granted on export profits of an 
enterprise accruing from its expor ts 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 Toba go, 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 of the enterprise 
in accordance with the following:  
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% 
  G/SCM/N/226/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 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 Fi scal Incentives Act in 2010 was $53,386,202.16. 
 
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 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, howev er it is desirable that such information includes 
statistics of production, consumption, imports  and subsidized product(s) or sector(s). 
 
(a) For the three (3) 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$) Total Re-Exports 
(EC$) 
2010 $911,969,837.94 $86,298,134.98 $25,740,161.19 
2011 $585,023,447.33 $54,394,681.80 $7,430,409.91 
 
 Please note that these figures represent to tal exports and imports for the period. 
 
Year Total Exports by Firms Benefiting From 
Fiscal Incentives (EC$) 
2010 92,888,358 
2011 39,502,155.60 
  Action taken to inform beneficiaries that sai d export subsidies will not be provided after 2015 
 
 Please be advised of the following steps taken to inform beneficiaries that export subsidies 
will not be provided after 2015. 
 G/SCM/N/226/VCT 
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   In July 2008, as a follow-up to the findings of  the 2007 TPR, the OECS Member States with 
assistance from the Commonwealth Secretariat undertook to outline a plan for implementing the decision in the extension of Article 27.4 programmes.  
 In 2008-2009, with the assistance of Tradecom, the OECS Secretariat contracted the services 
of a Trade Attorney and Legislative Drafter to  assist Member States with the implementation 
of WTO, CSME and EPA commitme nts. This included those notified of the WTO. As of June 
2009, the Consultant prepared model legislation and drafting guidelines that have been shared 
with Drafters and Trade Officials for their comments. The proposed legislation is intended to streamline he administration of incentives progra mmes, provide equal treatment of local and 
foreign investors, increase transparency and establish a monitoring mechanism for assessing 
the application and effectiveness of incentive schemes. 
 
 
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