AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED THREE THOUSAND FOUR HUNDRED SEVENTY.
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AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED THREE THOUSAND FOUR HUNDRED SEVENTY.
Republic Act No. 5326
June 15, 1968
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Summary of Republic Act No. 5326Definition of Cottage Industry (Section 11):
- An economic activity on a small scale carried out mainly at homes or other places for profit, done with family help.
- Capitalization not exceeding ₱15,000.
- Includes economic activities by students in schools as cooperative efforts under supervision.
- Lists 20 specific types of cottage industries covered, such as fiber crafts, woodcraft, hat weaving, mat weaving, metal craft, ceramics, shell craft, bamboo and rattan crafts, agricultural hand tools, toy craft, embroidery, dressmaking, tailoring, needle craft, loom weaving, machine parts manufacture, poultry and piggery, food preservation and canning, and other related crafts.
- Must be owned and operated by Filipino citizens or a corporation/partnership/cooperative with at least 75% Filipino ownership and all directors being Filipino citizens.
- Capitalization includes total current and fixed assets, excluding land and building used as residence, but including machinery, equipment, and leased land and building.
- Cottage industry products must be labeled as such, if feasible.
Tax Exemptions (Section 16):
- Cottage industry products are exempt from all taxes except specific and income taxes for 5 years from registration with NACIDA.
- 75% of raw materials must be of Philippine origin, except for embroidery, piggery, poultry, livestock, and metal craft industries.
- No exemption from percentage taxes on sales exceeding ₱200,000 per year.
- Provisions on cooperatives are not affected.
- Transfer of imported tax-exempt machinery and equipment to another cottage industry requires payment of duties and taxes; double rates if transferred to a non-cottage industry.
- Existing cottage industries with capitalization over ₱15,000 can enjoy exemptions for up to 3 months or until expiration of 5 years from registration, whichever comes first.
Reporting Requirement (Section 3):
- The Secretary of Commerce and Industry must submit an annual report to Congress on the amount of taxes waived for each registered cottage industry 30 days before the regular session.
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AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED THREE THOUSAND FOUR HUNDRED SEVENTY.
Republic Act No. 5326
•June 15, 1968
REPUBLIC ACT No. 5326
AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED THREE THOUSAND FOUR HUNDRED SEVENTY.
Section 1. Section eleven of Republic Act Numbered Three thousand four hundred seventy is hereby amended to read as follows:
"Sec. 11. Definition. The term "cottage industry" as used in this Act shall mean an economic activity in a small scale carried on mainly in the homes or in other places for profit and mainly done with the help of the members of the family with capitalization not exceeding fifteen thousand pesos. The term shall also include economic activities carried on by students of public and private schools, within school premises, as a cooperative effort, under supervision of a teacher or other person approved by and acting under the supervision and control of school authorities, either as part of or in addition to ordinary vocational training, provided all profits shall accrue to the students working therein. It shall include the following: (1) fiber crafts, such as making of abaca ropes and twines, buntal fiber extracting and buri...
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