RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/JAM/2
29 April 2002
(02-2439)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions from the UNITED STATES1 Regarding the
New and Full and Updating Notifications of JAMAICA2
The following communication, dated 25 April 2002, has been received from the Permanent
Mission of Jamaica.
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Manufacturing Incentives
Export Industry Encouragement Act
Q1. In what form is tax relief offered to companies under this programme (e.g., rebate of
taxes, exemption from taxes)?
Reply
The Export Industry Encouragement Act (EIEA) was enacted in 1956.  Approved companies
operating under this regime are provided tax relief in respect of profits or gains earned from the
approved export activity as well as exemption from import duties (CET/GCT) concerning capital
goods, and sewn materials imported for use in the production of the approved product.
Q2. Is the tax relief offered on a percentage basis?  If so, what percentages apply?
Reply
Companies exporting 100 per cent of output to markets outside of the CARICOM region are
entitled to total income tax relief in respect of  profits or gains earned from the approved export
product.
Approved entities/companies exporting a portion of output (partial exporters) qualify for tax
relief proportionate to the level of export sales.  In order to access this facility, exporters must attain a
5 per cent export threshold and must export their products to extra territorial CARICOM countries.
                                                     
1 G/SCM/Q2/JAM/1
2 G/SCM/N/3/JAM, G/SCM/N/16/JAM, G/SCM/ N/25/JAM, G/SCM/N/38/ JAM, G/SCM/N/48/JAM,
G/SCM/N/60/JAM.G/SCM/Q2/JAM/2
Page 2
Q3. How are “approved” manufacturers determined?
Reply
A company which is manufacturing or proposes to manufacture an approved export product
may be declared an approved manufacturer if the exporter satisfies the Minister of Finance and
Planning that:
• Production is geared for non-CARICOM markets
• The exporter is registered or incorporated in Jamaica.  If the company is registered or
incorporated outside Jamaica, it must have an office or place of business in Jamaica.
• The exporter possesses a factory for the production of the approved product.
• The exporters manufactured product has been approved by the industry’s standard setting
bodies.
Jamaica Export Free Trade Zones
Q1. In what form is tax relief offered to companies under this programme (e.g., rebate of
taxes, exemption from taxes)?
Reply
The Jamaica Export Free Zones Act was enacted in December 1982.  Companies operating
under this statute enjoy tax relief/exemptions from in come tax in respect of profits earned from the
approved activity.  Approved companies are also en titled to import capital goods, raw materials, and
articles to be used in connection  with the approved activity free of import duty.
Q2. Is the tax relief offered on a percentage basis?  If so, what percentages apply?
Reply
As stated above, free zones companies enjoy fu ll tax relief (tax exemption) in respect of
profits earned for the approved activity.
Q3. What are considered ‘approved’ activities?
Reply
Prescribed activities, which may be carried out in the Free Zones, are specified in the First
Schedule to the Act.  These activities are:
• Warehousing and storing
• Manufacturing operations
• Transshipment  operations
• Loading and unloading
• Exporting/importing
• Merchandising
• Assembling
• Packing and shippingG/SCM/Q2/JAM/2
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N.B. The Minister is empowered to amend this schedule of activities as necessary.
Q4. Are there current plans to phase out this export programme by 2003 similar to the
phase out plans for the Export Industry Encouragement Act?
Reply
The programme is being kept under review.  However, as of now, its continuation is
anticipated in accordance with the relevant Doha Ministerial Decision.
Concessionary Loans from the National Developmen t Bank (now the Development Bank of Jamaica)
and the EXIM Bank
Q1. On what terms are these loans offered?
Reply
DBJ loans denominated in Jamaican Dollars are available to the productive sector at an
interest rate of 13 per cent per annum to the final beneficiary, whilst credit denominated in USD is
available at interest rates of 10-13 per cent per annum.  Loans normally have maturities from three (3)
to ten (10) years.  A moratorium of up to three years on principal repayment may be granted ifdeemed necessary.
A special Development Bond was issued in  July 2000 to promote economic growth in
Jamaica.  This special bond is denominated in Jamaican dollars and carries an interest rate of 9.5 per
cent to the beneficiary.  Loans financed under this bond have a maturity of up to seven (7) years, anda moratorium on principal repayment of a maximum of two (2) years.  The priorities for funding
under the Bond for the manufacturing sector are:
• Retooling
• New technology
• Significant expansion
• Employment generation
• Foreign exchange earnings/savings
The concessionary loans offered by the EXIM Bank, for the most part relate to the interest
rates charged to borrowers and are expressed as follows:
(1) Short Term Working Capital loans for either  (i) pre-shipment costs or (ii) post-
shipment receivables financing or both, are available to exporters for a period of 120-
180 days at rates of interest of 9.5 per cent and 12 per cent per annum.
(2) Medium Term Re-tooling and Modernization loans are available to direct exporters,
linkage industries import substitution, and other indirect exporting activities for a
period of five (5) years at a rate of twelve  per cent (12) per annum.
(1) Medium Term Working Capital loan scheme is available to small  business
sector for a period of four (4) years at an interest rate of 12 per cent perannum.G/SCM/Q2/JAM/2
Page 4
Q2. Are these loans limited to specific industries and/or companies?  If so, can you please
provide information concerning which industries and/or companies received the loans?
Reply
All viable projects in the manufacturing sector  are eligible for funding from the DBJ.  The
industries which have benefited in the past are garment, furniture, agro-processing, metal works,
baking, paper, marble, chemical and chemical products, blocks, beverages and tobacco and non-
metallic minerals.
Similarly, the EXIM Bank loans are generally available to the manufacturing/productive
sector.  However, there are certain loan programmes which are geared specifically for exporters.These programmes fall mainly within the Short Term Working Capital loan scheme (as indicated
above).  There is no limitation to specific industries or companies, however, the EXIM bank focuses
on non-traditional sectors.  This means that areas such as bauxite and alumina, sugar, and banana
production would not be a priority focal point to the Bank.
Q3. Are these loans dependent on production and/or export activity?
Reply
Loans from both the DBJ and the EXIM Bank are not necessarily dependent on production
levels/export activity.  However, the EXIM Bank, as noted above, has specific loans which target
exporters.
Support for the Mining and Industrials Minerals Industry
Q1. Can you please identify the original enabling legislation, as well as when the recent
policy directives were implemented and took effect?
Reply
The original enabling legislation is the Bauxite and Alumina Industries Incentives Act 1950,
as amended by the December 1997 Act of the same name.  The recent policy directives wereimplemented and took effect in 1997.
Support for the Film Industry
Q1. Please describe what type of tax and duty concessions are provided under this
programme.
Reply
The Motion Picture Industry Encouragement Act (MPIEA) was enacted in 1972.  Under this
statute, recognized motion picture producers are enti tled to relief from income tax in respect of the
profits or gains earned in the business of motion picture production.  Additionally, machinery and/or
materials used for the building of studios, etc, for use in motion picture production, receives duty free
treatment.G/SCM/Q2/JAM/2
Page 5
Q2. Is this programme available to non-Jamaican residents/producers?
Reply
Incentive programmes are available to resident and non-residents provided they comply with
the prescribed statutory requirements.  Under section 13 of the MPIEA, no person/company other than
one incorporated or registered under the law enforced in Jamaica shall be declared a recognized
motion picture producer.  Hence, non-resident pr oducers/companies, once registered under the
prescribed statute are eligible for benefits.
Q3. What are the eligibility criteria to receive aid under this programme?
Reply
Recognized motion picture status is conditional on the following criteria being satisfied:
• an application for recognized status must be made by a company incorporated or
registered under Jamaican law.
• an undertaking by the applicant to spend monies for local disbursement in each
production year.
Support for the Tourism Industry
Q1. Please describe what type of tax and duty concessions are provided under this
programme.
Reply
The tax and duty concessions provided under the Hotel Incentives Act (HIA), and the Resort
Cottage Incentives Act (RCIA) include:
• income tax relief on profits accrued during the concession period.
• income tax relief on dividends paid to share holders.
• relief from import customs duty with regard to items(e.g. building materials/resort
equipment) as specified in the schedule.
• relief from the General Consumption Tax (GCT).
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