Section 2
SEC. 2. Section sixteen of the same Act is also amended to read as follows: "SEC. 16. The production, manufacture and sale of cottage industry products shall be exempt from all taxes, except specific and income 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 industry products with the Board: Provided, That seventy-five percent of the total cost of raw materials utilized in the production or manufacture of cottage industry products consists of raw materials of Philippine origin: Provided, further, That, the latter requirement as to raw materials shall not apply to embroidery, piggery, poultry, livestock and metal craft industries: Provided, furthermore, That no exemptions from the percentage taxes on sales shall be enjoyed for all sales in excess of two hundred thousand pesos each year: Provided, finally, That the provisions of the law on cooperatives shall not be affected by this Act. "Any individual or corporation, partnership or association who or which subsequently sells, leases, pledges or otherwise transfers any machinery and equipment imported and exempted from the tax as provided for in this Act, to another likewise engaged in the cottage industry, shall pay the corresponding duties and taxes thereon: Provided, however, That if the transfer is made in favor of another not engaged in the cottage industry, the duties and taxes shall be double the rates provided for under existing laws, all such transactions shall be made with the knowledge of the NACIDA and the Commissioner of Customs. "Any person or firm duly registered and engaged in the promotion, manufacture and sale of cottage industry products prior to the approval of this Act, whose capitalization is more than fifteen thousand pesos shall continue to enjoy the tax exemptions provided herein only for a period not exceeding three months from the date approval of this Act until the expiration of five years from the date such person or firm was registered to the Board whichever period comes first."