"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 leaf braiding;    (2)  woodcraft such as making of wooden shoes,  wooden fans,   walking  sticks   (canes)   and   wood carvings;   (3) hat weaving such as Calasiao, buri, raffia, karagomoy,  buntal and bamboo hats, salakots and helmets; (4)  mat weaving such as doormats, sleeping mats made in buri,  pandan,  balilan, and sabutan  and other similar  materials;  (5)  metal craft such as making of jewelries,  knives,   boloes,   scissors,   razors,   silverwares,   and works;  (6)  ceramics such as making of potteries  hollow  blocks,   tiles,   firebricks,   clay   stoves   and   other ceramic products;   (7)   shell   craft  such   as   making  of sea buttons and coconut shell products;   (8)   bamboo and  rattan crafts such as making of hammocks, basketry, making of  sawali  and   other bamboo   and  rattan  furniture articles;   (9)  small agricultural hand tools such as plow points;   (10)  toy craft such as making of dolls and toys;  (11) embroidery,  dressmaking   and   tailoring   industries;  (12) needle   craft   (including  knitting   and   crocheting); (13)  loom weaving such as making of fish nets; making of  mosquito nets, weaving of Ilocano cloth, Igorot weaving, piña  ‘barong  Filipino’, jusi  and  sinamay;   (15)   machine parts manufacture   such   as   wheels   and   stone  mortars;  (15)  poultry including ducks raising and 'balut' making;  (16)  piggery;   (17)   home cigar making;   (18)   food pre­servation     and     canning,     including     the     making    of dried    and/or    smoked    fish    or    meat,    vinegar    wine, lambanog,   ‘bagoong’, pili     or    peanuts   confectionery
or coconut   candy   (bucayo) ;    (19)   other   related   crafts  such as making of brooms, pandan, nito and buri,  ‘karagamoy’ bags,  bead making, guitar and other musical  instruments; and   (20)   such other industries done in home with the aid of electrical gadgets and/or by hand manipulation.    All cottage industries shall be owned and  operated by Filipino citizens, or by a corporation, partnership,  or   cooperative,  at least seventy-five percent of the capital or investment of which is owned by Filipino citizens.   All   members   of   its   Board   of   Directors  shall  be   Filipino   citizens.

"The word  capitalization as used in this section mean the total current assets and fixed assets, excluding the value of the land and building if the same are residence  of  the  owner,  but  including  machinery and equipment, land and building leased, rented and/or    used at least six months of each year.   For purposes of this Act, any and all  branches, agencies,  outlets or divisions  of a licensed
cottage industry shall  be collated to determine the  capitalization   thereof.

"The term  'cottage industry products' shall mean products produced by cottage industries and shall be labeled,  if  feasible, as Cottage  Industry  Products—Made  in  the Philippines,  together with the identity of the producer."

"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."