WORLD TRADE  
ORGANIZATION  G/SCM/N/155/ATG 
G/SCM/N/160/ATG 22 November 2007 
 
(07-5138) 
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  
 
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  
 
 
ANTIGUA AND BARBUDA 
  The following communication, dated 14 November 2007, is being circulated at the request of 
the Delegation of Antigua and Barbuda.    
_______________ 
 
  Pursuant to the procedures in G/SCM/39, and to the decisions in G/SCM/50 and Add.1, and 
G/SCM/51 and Add.1, Antigua and Ba rbuda hereby presents an updating notification in respect of the 
programmes that have been granted an extension of the transition period under Article 27.4 of the 
Agreement on Subsidies and Countervailing Measures.   As required by the procedures and by the exte nsion decisions, neither programme has been 
modified so as to make it more fa vourable in terms of scope, coverage or intensity of benefits than it 
was as of 1 September 2001. 
 
 In accordance with Article 25.7 of the SCM Ag reement, this notification does not prejudge 
either the legal status of the notified progr ammes under GATT 1994 and the SCM Agreement, the 
effects under the SCM Agreement, or the nature of the Programme themselves. 
 
 In accordance with Article 25 of the Agre ement on Subsidies and Countervailing Measures 
and Article XVI:I of the General Agreement on Tariffs and Trade (GATT) 1994, Antigua and 
Barbuda hereby presents an upda ting notification, in accordance with Secretariat document 
G/SCM/39, with respect to programmes identif ied in our initial documentation submitted 
(G/SCM/N/74/ATG). 
 
 Please be informed, that not all elements of  the notified programmes, including subsidies 
provided thereunder, necessarily involve export subsidies.   Antigua and Barbuda wishes to reiterate that, in keeping with Article 25.7 of the Agreement 
on Subsidies and Countervailing Measures, this notif ication does not prejudice its legal status under 
the GATT 1994 or the said Agreement, its effect s under the Agreement or the nature of the 
programme or measure;  furthermore, notification of a programme or measure does not prejudice its actionable or non-actionable nature. G/SCM/N/155/ATG 
G/SCM/N/160/ATG Page 2 
 
 
   
PROGRAMMES 
 
Fiscal Incentives Act Cap 172 (December 1975) 
 
Free Trade and Processing Zone Act No. 12 of 1994      Programme 1 
 1. Description of the programme
 
  The Fiscal Incentives Act is an Act to provid e incentives to industry, mobilize and direct 
capital for new investment, and attract fo reign private investment and capital. 
 
2. Period covered by the notification
 
  Programme status as of June 2006.  3. Policy objective and/or purpose of the subsidy
 
 
 To attract private investors who will contribut e to the desired expansion of national output, 
thereby promoting economic growth, developmen t and increased employment in a diversified 
economy.  4. Background and authority for the subsidy
 
  Background  
 The promotion of private investment is an inte gral part of the development plan of Antigua 
and Barbuda as we continue to diversify produc tion and reduce our reliance on tourism.  Economic 
expansion generates demand for foreign exchange .  Given our narrow resource base Antigua and 
Barbuda continues to need resource inflows and one of the best ways to achieve this is through direct 
foreign investment.   The Fiscal Incentives Act was passed to give e ffect to an agreement on the harmonization of 
fiscal incentives to industry among CARICOM countries. 
 
 Authority 
 
 Fiscal Incentives Act Cap172, (December of 1975) 
 5. Form of Subsidy
 
 
 The Fiscal Incentives Act provides relie f from taxes in the following ways: 
 
• Waiver from Customs Duty and Consumption Tax on plant, equipment, machinery, spare 
parts, raw materials or components thereof, fo r between ten (10) to fifteen (15) years, 
dependent on which group of enterprise.  This is also subject to the satisfaction of the 
Comptroller of Customs and Excise, that the above list is required for: 
  G/SCM/N/155/ATG 
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    (a) Constructing, altering, reconstruc ting or extending the approved enterprise, 
that is, an enterprise declared by Order of the Minister responsible for industry; or 
 
  (b) Equipping an enterprise for the purpose of manufacturing an approved 
product, that is, a product declared by Order of the Minister responsible for industry. 
 
• Complete or partial exemption from the paym ent of income tax on profits on the profits 
arising from the sale of an approved product from the production day for a period not 
exceeding the time given to the Enterprise, that is 10 – 15 years. 
 
• Where shareholders or their nominees are not resident in Antigua and Barbuda, they shall 
be exempted from income tax on dividends, in respect of the amount of tax that exceeds the tax liability of the shareholder in his country of residence. 
 
• Where the export profits amount to ten (10) per cent or more of the entire profits of an 
enterprise, from the export of an approved product, relief shall be granted from income tax on the export profits. This relief is granted by way of tax credits. 
  6. To whom and how the subsidy is provided
 
 
 Fiscal incentives are granted to private inv estors both foreign and local to facilitate the 
development of industries, in particular manufact uring, agro- processing, and agriculture, as it 
pertains to this notification.   An application is made to the Minister res ponsible for industry, by or on behalf of the 
enterprise, stating: 
 
• The locality or proposed locality of the factory; 
• The construction day; 
• The production day; 
• The approved product already being manufactur ed or intended to be manufactured; and 
• All information relevant to de termine the local value added. 
  If the Minister is satisfied that it is in the pub lic interest to grant such  enterprise incentives, he 
may by Order published in the Gazette declare the en terprise to be an approved enterprise with effect 
from the date specified in the Order. 
 
 The relief from taxes, or "tax holiday period", is granted on import duties, income tax and export profits, depending on the group in which the enterprise is categorized.   There are five groups of enterprises and the tax holiday applicable is as follows: 
 
• Group I Enterprise, one in which the local value added is at least fifty per cent (50%) of the 
amount realized from the sale of an a pproved product; up to 15 years relief; 
• Group II Enterprise, one in which the local va lue added is between 25 per cent and 50 per 
cent, up to 12 years; 
• Group III Enterprise, one in which the local va lue added is between 10 per cent and 25 per 
cent, up to 10 years; G/SCM/N/155/ATG 
G/SCM/N/160/ATG Page 4 
 
 
  • Enclave Enterprise, one in which production is exclusively for export; up to 15 years; and 
• Highly capital intensive industry, one in which the capital investment is not less than 
US$25 million, up to 15 years. 
 Note
:  the definition of local value added is the amount realized from the sales of the product over a 
continuous period of twelve (12) months, minus the following: 
  1. Cost of imported raw materials, co mponents, parts of components, fuels, and 
services; 
 2. Wages and salaries paid to nationals of Caricom Member States;  3. Profit and dividends dist ributed to foreign nationals; 
 4. Interest, management charges and other income payment to non-residents (including 
companies); and 
 5. Depreciation of imports of plant, machinery and equipment. 
 
 The  local value added is weighted by the wages or salaries paid to nationals of a Member Sate 
of Caricom expressed as percentage of the total sales of the approved product and calculated in 
accordance with the formula:  
 V (100 + W)
 
       100  
 V represents the local value added expressed as a percentage of the total sales of the approved 
product; and  W represents the wages and salaries paid to nationals  of a Member State expressed as a percentage of 
the total sales of the approved product.  
 
 The Fiscal Incentives Act provides non-fiscal in centives to companies w ith a rebate for a 
portion of their income tax based on their export profits as a percentage of total profits.  All 
Enterprises (Group I, II, II, Enclave, Highly Capita lized Enterprises) are eligible for the rebate. 
However, eligibility does not occur until the tax holiday  period is over.  Rebate is only good for an 
additional 5 years.  The schedule is as shown in the Table below: 
 
Rebate on Income Tax based on export Profits
 
 
Export Profits as a 
Percentage of tax on 
of total Profits Rebate of Income tax a 
as Percentage of 
Tax on Export Profits 
10 – 20 25 
21 – 40 35 
41 – 60 45 
61 – 100 50 
  G/SCM/N/155/ATG 
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  7.   Subsidy per unit  
 
As of 1 September 2004, approximately 35 firms are registered under the Fiscal Incentive 
Act.  Below is the breakdown of the Sectors/Firms and Sales: 
 
Sectors Firms/Companies Sales (US$) 
   
Beverages 2 11,810,461 
Condiments 3 160,000 
Detergent 2 1,500,000 
Garments 6 1,200,000 
Light Industries 3 8,237,464 
Other 19 2,4399,000 
 
8. Duration of subsidy and/or any other time  limits attached to it, including date of 
inception/commencement  
 
 This programme was set up in 1975.  This subs idy programme is applicable for ten (10) years. 
 9.   Statistical data on the impact of the programme
 
 
Merchandise Imports/Exports (US$ Millions )* 
 
 2000 2001 2002* 2003* 2004* 2005* 
Export 16.52 17.27 17.62 18.36 19.35 20.42 
Imports 342.09 317.29 324.71 350.51 369.55 371.22 
 
Source : Ministry of Finance, Economic Policy Unit 
 
*These are estimations/projections 
 Note: These are the actual trade data for Antigu a and Barbuda, and not trade affected by this 
programme. 
 
 
Programme 2  
1. Description of the programme
 
  Free Trade and Process Zone Act is an Act to a ttract foreign and local private investment and 
capital for various Manufacturing and Service entities. 
 
2. Period covered by the notification
 
  1 June 2006  
3. Policy objective and/ or purpose of the subsidy
 
  To attract private investors who will contri bute to the growth and development of the 
informatics and telecommunications related servi ces. In addition, to attract investment in 
Pharmaceutical and other light manufacturing industries. 
 G/SCM/N/155/ATG 
G/SCM/N/160/ATG Page 6 
 
 
  4. Background and authority for the subsidy
 
 
 Background  
 The promotion of private investment is an inte gral part of the development plan of Antigua 
and Barbuda as we continue to diversify produc tion and reduce our reliance on tourism and promote 
establishment of certain manufacturing and services entities in Antigua and Barbuda.   
 
 Authority 
  Free Trade and Processing Zone Act Cap No. of 1994. 
 5. Form of Subsidy
 
 
 The Free Trade and processing Zone Act provid es relief from taxes in the following ways: 
 
(a) Exemption from the payment of Custom Duty, Consumption and other taxes on the 
importation of machinery, equipment, spar e parts, and constr uction materials and 
other items needed to construct a nd operate facilities within the FTPZ; 
 
(b) Exemption from the payment of Custom Duty, Consumption and other taxes on the 
importation of raw materials and other goods to be incorporated in the products 
produced or assembled within the FTPZ; 
 (c) Exemption from the payment of income and other taxes of any kind other than Social 
Security, Medical Benefits and the Edu cation Levy on the earnings accruing to any 
person by virtue of accruing to any pers ons by virtue of carrying on his/her 
employment in any industrial or commercial activity within the FTPZ; 
 (d) Exemption from the payment of export taxes or levies on the exportation from the 
FTPZ to any place outside of Antigua and Ba rbuda of any goods, or articles produced 
or manufactured in the FTPZ;  
 (e) Exemption from the payment of taxes of an y kind on the repatriation of profits earned 
in the Zone;  and 
 
(f) Exemption from the payment of taxes or levies imposed by the Government in 
respect of any Industrial or Commercial ac tivity being carried out within the FTPZ. 
  In order to obtain a licence to operate in the FTPZ, an application must be submitted on the subscribed Form to the Commissioner.  The Co mmissioner will submit this application to the 
Commission for examination and approval. 
 
The decision to grant a licence is based on a number of considerations: 
 
1. The level of investment; 
 
2. Employment generation capacity of the project; 
 3. Foreign exchange generation of the project;   G/SCM/N/155/ATG 
 G/SCM/N/160/ATG 
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  4. Technological adaptability and transfer possibilities; and  
 5. Environmental impact.  
 
 The Licence fee ranges between US$10,000 and US$20,000 and is not dependant on the size 
of the project.  
6. To whom and how the subsidy is provided
 
 
 Incentives to operate an entity in the Free Tr ade and Processing Zone are granted to private 
investors both foreign and local to facilitate the de velopment of industries, in particular certain 
manufacturing and services entities.  7.   Subsidy per unit
 
 
No statistical information is available since the fi rst entity was not granted a licence to manufacture in 
the FTPZ until the last quarter of 2001.  Presently , the factory is still under construction and the 
company does not plan to be in operation until the first quarter of 2005.  8. Duration of Subsidy
 
  
 The programme was set up in 1994.  However,  the first licence granted to a manufacturing 
entity to operate in the FTPZ was not issued until the last quarter of 2001.   9. Statistical data on the impact of the Programme
  
 
Merchandise Imports/Exports (US$ Millions)  * 
 
 2000 2001 2002* 2003* 2004* 2005* 
Export 16.52 17.27 17.62 18.36 19.35 20.42 
Imports 342.09 317.29 324.71 350.51 369.55 371.22 
 
Source : Ministry of Finance, Economic Policy Unit 
 
*These are estimations/projections 
 
Note :  These are the actual trade data for Antigua and Barbuda, and not trade affected by this 
programme .   
 
 As noted above, the first licence granted to a manufacturing entity to operate in the Free 
Trade and Processing Zone was not issued until the last quarter of 2001.    G/SCM/N/155/ATG 
G/SCM/N/160/ATG Page 8 
 
 
   
CHAPTER 172 
 
THE FISCAL INCENTIVES ACT 
 
Arrangement of Sections Section  1. Short title.  
PART I 
 
PRELIMINARY 
 
2. Interpretation. 
3. Computation of local value added. 4. Determination of value of content. 5. Non-resident. 6. Declaration of approved product. 7. Declaration of approved enterprise. 
8. Applications for approval. 
9. Objections to proposals to approve a product or enterprise. 10. Cabinet and Minister to have absolu te discretion in respect of approval. 
11. Classification of enterprises. 12. Benefits for enterprise engaged in  highly capital intensive industry. 
 
PART II 
 
PROVISION RELATING TO INCOME TAX 
 13. Exemption from income tax. 
14. Depreciation allowance. 
15. Deduction for capital expenditure. 16. Set-off. 17. Losses carried forward for purpose of set-off. 18. Export allowance may be granted: 
19. Dividends. 
20. Interest.  
PART III 
 
PROVISIONS RELATING TO CUSTOMS DUTY 
 
21. Licence to import. 22. Record and inspection of articles. 23. Restriction on disposal of articles.  G/SCM/N/155/ATG 
 G/SCM/N/160/ATG 
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PART IV 
 
MISCELLANEOUS 
 
24. Delay of construction or manufacture. 25. Revocation of order. 26. Restriction on use of factory. 27. Appraisal of performance of enterprise. 
28. Transfer of status of approved enterprise. 
29. Regulations. 30. Publication in Gazette. 
31. Savings.  
 
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THE FREE TRADE AND PROCESSING ZONE 
AREA ACT, 1994 
ARRANGEMENT OF SECTIONS 
Section 
1. Short title. 
2. Interpretation. 3. Establishment of Commission.  4. Seal and procedure for sealing documents. 
5. Acquisition of land for free trade and processing zone. 
6. Declaration of a free trade and processing zone. 7. Functions and powers of the Commission. 8. Composition and administration of the Commission. 9. Meetings and procedures of the Commission. 
10. Appointment and duties of Commissioner. 
11. Procedure for application and grant of licence. 12. Licences. 13. Commission not to approve unlawful activity. 14. Incentives to licensed industries. 15. Conditions for employment in  free trade and processing zone. 
16. Licensee to comply with the Act or Regulation etc. 
17. Environmental protection. 18. Movement of goods in and out  of free trade and processing zone. 
19. Establishment of customs post in free trade and processing zone. 20. Commission to charge royalties. 
21. Investments. 
22. Reserve fund. 23. Accounts and audit. 24. Law and legal proceedings. 25. Preservation of secrecy and nondisclosure of information to unauthorized person. 
26. Annul Report. 
27. Regulation. 
  
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