Exemption from Tax of Cottage Industries Duly Registered Under Republic Act No. 3470

September 3, 1963 REVENUE MEMORANDUM CIRCULAR NO. 25-63 SUBJECT : Exemption from Tax of Cottage Industries Duly Registered Under Republic Act No. 3470 TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder the letter dated August 13, 1963, of the Honorable, the Secretary of Finance, to the Commissioner of Internal Revenue, to wit: prcd "Department of Finance "Manila "August 13, 1963 "The Commissioner of Internal Revenue "Manila "S i r : "Anent the attached letter dated August 7, 1963, of Collection Agent Servillano M. Estrellas of that Bureau, assigned at Binmaley, Pangasinan, please be informed that under its letters dated November 14, 1962 and December 10, 1962, this Department has ruled that cottage industries duly registered with the NACIDA under Republic Act No. 3470, are exempt from the following taxes: "1. The fixed and privilege tax on business; "2. The percentage tax on sales of cottage products; "3. The taxes and duties on machinery and equipment imported directly by operators of cottage industries to be used exclusively in the production or manufacture of cottage industry products, to wit: "a. customs duties; "b. compensating tax; and "c. special import tax "4. Mining taxes in the case of small mining operators; "5. Specific tax on cigars, in the case of home cigar makers; and "6. Specific tax on wines, in the case of home makers of vinegar wine. "The above rulings of this Department were based on Section 16 of Republic Act No. 3470 which states that: "Section 16. The production, manufacture and sale of cottage products shall be exempted from all taxes for a period of five years from the date of registration of the person or firm engaged in the production or manufacture of cottage products with the Board." "It should be noted, however, that the "registration of the person or firm engaged in the production or manufacture of cottage products with the Board" is a prerequisite before tax exemption could be availed of. Without such registration having been effected, therefore, which could be proved by means of a certificates of registration issued by the NACIDA, no tax exemption could be granted in favor of any cottage industry. "As it is probable that other collection agents of that Bureau may encounter the same problem as the writer of the basic communication had, it is requested that the pertinent contents of this letter be circularized among the personnel concerned. LLpr "Very truly yours, "(Sgd.) RODRIGO D. PEREZ, JR. "Secretary" Enforcement and Publicity Internal revenue officers and others charged with the enforcement of internal revenue laws are enjoined to be guided accordingly. (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue