WORLD TRADE
ORGANIZATIONG/SCM/N/71/ATG
6 March 2002
(02-1124)
Committee on Subsidies
and Countervailing MeasuresOriginal:  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
ANTIGUA AND BARBUDA
The following communication, dated 27 February 2002,  has been received from the Ministry
of Commerce, Industry and Business Development of Antigua and Barbuda.
_______________
Pursuant to Article XV1 I of the General Agreement on Tariffs and Trade (GATT) 1994 and
Article 25 of the Agreement on Subsidies and Countervailing Measures (“hereinafter referred to as the
Agreement on Subsidies”), Antigua and Barbuda hereby presents a new and full notification of the
programmes for which we are seeking an extension of the transition period pursuant to Article 27.4
(G/SCM/N/74/ATG), in accordance with the Secretariat’s document G/SCM/3.9.
On further analysis of Article 27.4 it was determined that the Hotels Aids Act, Cap 207 of
1954, Fisheries Act, Cap 173, and the relief granted to the Fishing Industry under the Antigua and
Barbuda Customs Duties Act, No. 27 of 1993, and under the Consumption Tax Act, No. 28 of 1993,
the Eastern Caribbean Central Bank (ECCB) Export Credit Guarantee Scheme, and all other
enterprises that the Government considered on their merits and granted such concessions as the
Cabinet of Antigua and Barbuda deems appropriate are not relevant to this Article, and therefore have
not been included in this Notification.
In accordance with Article 25.7 of the SCM Agreement, this notification does not prejudge
either the legal status of the notified programmes under GATT 1994 and the SCM Agreement, the
effects under the SCM Agreement, or the nature of the Programme themselves.G/SCM/N/71/ATG
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In accordance with Article 25 of the Agreement on Subsidies and Countervailing Measures
and Article XVI:I of the General Agreement on Tariffs and Trade (GATT) 1994, Antigua and
Barbuda hereby presents a new and full notification, in accordance with Secretariat document
G/SCM/39, with respect to programmes identified in our initial documentation submitted
(G/SCM/N/74/ATG).
The legislation underlying the notified programmes is attached to the notification.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 notification does not prejudice its legal status under
the GATT 1994 or the said Agreement, its effects 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.
Programmes
Fiscal Incentives Act Cap 172 (December 1975)
Free Trade and Processing Zone Act No. 12 of 1994
Programme I
1. Description of the programme
The Fiscal incentives Act is an Act to provide incentives to industry, mobilize and direct
capital for new investment, and attract foreign private investment and capital.
2. Period covered by the notification.
Programme status as of 1st September 2001.
3. Policy objective and/ or purpose of the subsidy
To attract private investors who will contribute to the desired expansion of national output,
thereby promoting economic growth, development and increased employment in a diversified
economy.
4. Background and authority for the subsidy
Background
The promotion of private investment is an integral part of the development plan of Antigua
and Barbuda as we continue to diversify production and reduce our reliance on tourism.  Economic
expansion generates demand for foreign exchange.  Given our narrow resource base Antigua andBarbuda continues to need resource inflows and one of the best ways to achieve this is through direct
foreign investment.G/SCM/N/71/ATG
Page 3
The Fiscal Incentives Act was passed to give effect 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 relief from taxes in the following ways:
• Waiver from Customs Duty and Consumption Tax on plant, equipment, machinery, spare
parts, raw materials or components thereof, for between ten (10) to fifteen (15) years,
dependant 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:
(a) Constructing, altering, reconstructing 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 and approved product, that
is, a product declared by Order of the Minister responsible for industry.
• Complete or partial exemption from the payment 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) percent 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.
8. To whom and how the subsidy is provided
Fiscal incentives are granted to private investors both foreign and local to facilitate the
development of industries, in particular manufacturing , agro- processing, and agriculture, as it pertain
to this notification.
An application is made to the Minister responsible 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 manufactured or intended to be manufactured; and
• All information relevant to determine 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 enterprise to be an approved enterprise with effect
from the date specified in the Order.G/SCM/N/71/ATG
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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 approved product; up to 15 years relief;
• Group II Enterprise, one in which the local value added is between 25 per cent and 50 per cent, up
to 12 years;
• Group III Enterprise, one in which the local value added is between 10 per cent and 25 per cent,
up to 10 years;
• 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$25 million, up to 15 years.
Note: the definition of local value added is the amount realized from the sales of the product over a
continuous period of twelve (12) months, minus the following:1. Cost of imported raw materials, components, parts of components, fuels, and
services;
2. Wages and salaries paid to nationals of Caricom Member States;3. Profit and dividends distributed to foreign nationals;
4. Interest, management charges and other income payment to nonresidents (including
companies); and
5. Depreciation of imports of plant, machinery and equipment.
The local value added is weighted by the wages or salaries paid to nationals of a Member Sate
of Caricom expressed as percentage of the total sales of the approved product and calculated in
accordance with the formula:
V (100 + W)
      100
V represents the local value added expressed as a percentage of the total
 sales of the approved product; and
W represents the wages and salaries paid to nationals of a Member State
 expressed as a percentage of the total sales of the approved product.
The Fiscal Incentives Act provides non-fiscal incentives to companies with a rebate for a
portion of their income tax based on their export profits as a percentage of total profits.  All
Enterprises are (Group I, II, II, Enclave, Highly Capitalized Enterprises) are eligible for the rebate.However, eligibility does not occur until the tax holiday period is over.  Rebate is only good for an
additional 5 years.  Schedule is as shown in the Table below:G/SCM/N/71/ATG
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Rebate on Income Tax based on export Profits
Export Profits as a
Percentage of tax on
of total ProfitsRebate of Income tax a
as Percentage of
Tax on Export Profits
10 - 20 25
21 - 40 35
41 - 60 45
61 - 100 50
7.  Subsidy per unit
As of September 1, 2001, approximately 29 firms are registered under the Fiscal Incentive
Act.  Below are the breakdown of the Sectors/Firms and Sales:
Sectors Firms/Companies Sales (US$)
Beverages 2 9,400,000
Condiments 3 100,000
Detergent 2 1,500,000
Garments 6 1,200,000
Light Industries 2 8,097464
Other 14 1,800,000
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 subsidy programme is applicable for ten (10) years.
9.  Statistical data on the impact of the programme
Merchandise Imports/Exports (US$ Millions) *
1995 1996 1997 1998 1999 2000
(projected
Exports(Fob)53.1 38.9 38.8 37.4 35.9 39.9
Imports
(Fob)301.8 321.8 325.8 344.3 339.2 375.0
* Sources : Eastern Caribbean Central bank; and IMF staff estimates and projections
Note: These are the actual trade data for Antigua and Barbuda, and not trade affected by
this programme.
  G/SCM/N/71/ATG
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Programme 2
1. Description of the programme
Free Trade and Process Zone Act is an Act to attract foreign and local private investment and
capital for various Manufacturing and Service entities.
2. Period covered by the notification.
1st September 2001.
3. Policy objective and/ or purpose of the subsidy
To attract private investors will contribute to the growth and development of the informatics
and telecommunications related services.  In addition, to attract investment in Pharmaceutical and
other light manufacturing industries.
4. Background and authority for the subsidy
Background
The promotion of private investment is an integral 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 provides 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, spare parts, and construction materials and other items
needed to construct and 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 Education Levy on the earnings accruing to any person byvirtue of accruing to any persons 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 Barbuda of an y goods, or articles produced or manufactured
in the FTPZ;
(e) Exemption from the payment of taxes of any kind on the repatriation of profits earned in the
Zone;  and