WORLD TRADE  
ORGANIZATION  G/SCM/N/192/VCT 
11 August 2009 
 (09-3854) 
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 10 August 2009,  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 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 program finds its 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 incentiv es 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/192/VCT 
Page 2  
 
  5. Form of subsidy (i.e. Gran t, 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;   
- 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 determined 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 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 III 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 Incentive Enterprises , up to 15 years, in there is an investment of not less 
than US$25 million.   
 
 The Act provides for the income tax relief in th e form of tax credits to enterprises once the tax 
holiday period has expired.  This is contingent on exportation and is granted on export profit of an 
enterprise accruing from its exports of the approve d 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 (5) y ears immediately following the expiration of the tax 
holiday period.  Relief is granted if  export profits amount to ten per cen t or more of the entire profit of 
the enterprises in accordan ce with the following:   
 
Amount of Export profits 
expressed as a percentage of the 
entire profit 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/192/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 (indicating, 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  Incentive 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 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, 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 year s 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$) Total Export  
(EC$) Total Re-Export  
(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 53,391,792.71 
 Action taken to inform beneficiaries that said  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.    
• 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.   
 G/SCM/N/192/VCT 
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  • In 2008-2009, with the assistance of Tradecom, the OECS Secretariat c ontracted the services 
of a Trade Attorney and Legislative Drafter to  assist Member States with the implementation 
of WTO, CSME and EPA commitments.  This includ ed the review of legislation pertaining to 
Fiscal Incentive programmes, including those not ified to the WTO.  As of June 2009, the 
Consultant prepared model legislation and dr afting guidelines that have been shared with 
Drafters and Trade Officials for their comments.   The proposed legislation is intended to 
streamline the administration of incentive progra mmes, provide equal treatment of local and 
foreign investors, increase transparency a nd establish a monitoring mechanism for assessing 
the application and effectiveness of incentive schemes.   
  
 
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