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~ITY OIJNIL (:it1 of ltlaoiJa REGITLAR SESSION NO. 227 8'1'0 ITV OITNCIL Begun and held in the City Council on Thursday, the eight day of March, Two Thousand Twelve

ORDINAILCE 110.8320
AN ORDINANCE GRANTING TAX INCENTIVES TO OVERSEAS FILIPINO WORKERS INVESTING IN SMALL AND MEDIUM-SCALE BUSINESS ENTERPRISES IN THE CITY OF MANILA AND FOR OTHER RELATED PURPOSES PRINCIPAL AUTHORS: HON. JOHN MARVIN C. NIETO, Hon. Joel R. Chua, Hon. Casimiro C. Sison, Hon. Raymundo R. Yupangco, Hon. Jocelyn B. Dawis-Asuncion, Hon. Ma. Asuncion G. Fugoso, Hon, Ernesto M. Dionisio, Jr., Hon. Ramon D. Morales, Hon. Ernesto C. Isip, Jr., Hon. Bernardito C. Ang, Hon. Dennis B. Alcoreza, Hon. Irma C. AlfonsoJuson, Hon. Don Juan "DJ" Bagatslng, Hon. Rafael P. Borromeo, Hon. Ruben F. Buenaventura, Hon. Loulsito N. Chua, Hon. Richard C. Ibay, Hon. Cristina A. Isip, Hon. Danilo Victor H. lacuna, Jr., Hon. Nurnero G. Lirn, Hon. Edward V.P. Maceda, Hon. Erick Ian O. Nieva, Hon. Robert R. Ortega, Jr., Hon. Jocelyn J. Qulntos, Hon. Elizabeth Z. Rivera, Hon. Ramon M. Robles, Hon. Josefina M. Siscar, Hon. Edward M. Tan, Hon. Salvador H. Lacuna, Hon. Moises T. t.lm, Hon. Nino M. dela Cruz, HON. MARIA SHEILAH H. LACUNA-PANGAN, Majority Floor Leader, HON. MARLON M. LACSON, President Pro-Tempore and Acting Presiding Officer and HON. FRANCISCO "Isko Moreno" DOMAGOSO, Vice Mayor and Presiding OffIcer Be it ordained by the City Council of Manila, is session assembled, THAT: SECTION 1. Title. - This Ordinance shall be known as the "Overseas Filipino Worker.' Small and Medium-Scale Enterprises (OFW-8MEs) Ordinance of 2012". SEC. 2. Declaration of Policy. - In recognition of the invaluable contributions of overseas Filipino workers to the national economy, and of the potential of small and medium-scale enterprises for employment generation resulting in economic growth and a self-sufficient industrial foundation for the City of Manila, it Is hereby declared a policy of the City to encourage overseas Filipino workers to establish or Invest in such enterprises within the City of Manila by granting incentives and benefits for the same.

SEC. 3. Definition of Terms . Whenever used in this Ordinance the following terms shall mean.

3.1.

3.2.

3.3.

"Overseas Filipino Worker (OFW)" - Any Filipino working overseas under a valid employment contract duly approved by the Philippine Overseas Employment Administration (POEA), including seamen employed in international maritime navigation: PROVIDED, That one whose employment overseas has ceased, by reason of expiration of such contract or otherwise, may be considered an OFW under this Ordinance if the cessation took place not more than one (1) year before the filing of an application for the registration provided for in Section 4 hereof. "Small-Scale Enterprise" - Any sole proprietorship, partnership or stock corporation engaged in any legitimate business, industry and/or services, whose total assets have a value of not more than One Million Five Hundred Thousand Pesos (PhP 1,500,000.00). "Medium-Scale Enterprise" - Any sole proprietorship, partnership or stock corporation engaged in any legitimate business, industry and/or services, whose total assets have a value of over One Million Five Hundred Thousand Pesos (PhP 1,500,000.00) but not more than Three Million Pesos (PhP 3,000,000.00).

For the purpose of this and the immediately preceding subsection, "Service" shall exclude those rendered by (I) natural persons who are duly licensed by the government after having passed a government licensure examination, in connection with the exercise of their profession, and (ii) juridical persons such as partnerships or corporations engaged in consultancy, advisory and similar services where the performance of such services are essentially carried out through licensed professionals, likewise in connection with the exercise of their profession.

3.4.

"Assets" - All kinds of properties, real or personal, owned by the enterprise and used for the conduct of its business, including those arising from loans but excluding the enterprise's principal office and the land on which it is situated.

SEC. 4. Registration and Issuance of Certificate. - Small or medium-scale enterprises duly registered with the appropriate government agency and established in the City of Manila, after the passage of this Ordinance by any of the following. may be registered with the City Treasurer: (i) sole proprietorships owned by an OFW; (ii) partnerships, more than fifty (50) percent of the capital of which was contributed by one or more partners who are OFWs; and (iii) stock corporations, more than fifty (50) percent of the outstanding capital stock of which is held by one or more OFWs. For the purpose of the foregoing, an OFWs ownership of contribution, membership or shareholding in an enterprise shall not be considered if such OFW was himself the owner of or a participant in another enterprise previously registered hereunder, and his participation therein had been considered in determining that such previously registered enterprise met the OFW participation required in the preceding paragraph.

Upon such registration, the City Treasurer shall issue a Certificate of Registration stating that the business entity is a duly registered small or medium-enterprise, as well as the period of its exemption from the payment of business tax as hereinafter provided. A business address used by an enterprise registered hereunder may be used again by another enterprise for the purpose of qualrfying for the benefits of this Ordinance: PROVIDED, That at least one year shall have lapsed from the termination of the exemption of the former enterprise and the latter enterprise shall have been established and duly registered with the appropriate government agency likewise at least one year after such termination. 4.1. Documents to be Submitted. - To determine the qualification and value of the assets of a business entity applying for registration as a small or medium-scale enterprise, the City Treasurer shall required the submission documents: of the following
I

a. Certificate from the POEA or the Overseas Workers Welfare Administration (OWWA) that the persons seeking registration hereunder of their business entity or enterprise are OFWs as defined in Subsection 3.1 of this Ordinance, or a copy of their overeseas employment contract duly approved by the POEA; b. Documents of registration as a business entity or enterprise issued by the appropriate government agencies. such as the Securities and Exchange Commission (SEC) for corporations and partnerships and the Department of Trade and Industry (DTI) for sale proprietorships; Taxpayer Indentification Number (TIN); and Sworn Affidavit executed by the sole proprietor, the managing partner of the partnership, or the president of the corporation that the total assets of the enterprise do not exceed the limits set in Subsections 3.2 or 3.3 of this Ordinance.

c. d.

In addition to the foregoing, the City Treasurer may require the submission of other perstinent documents, which may be reasonably necessary to enable him to determine the qualification and total value of the assets of the business entity seeking registration. SEC. 5. Exemption from Business Tax. - Upon registration, the small or medium-scale enterprise shall be exempt from the payment of business tax based on gross income for a non-extendible period of two (2) and three (3) years, respectively. This exemption is without prejudice to any other benefit or tax exemption granted to the enterprise by law or any other ordinance. 5.1. Eligibility of Exemption. - To qualify for the above exemption, the small or medium-scale enterprise must not be a branch, subsidiary or division of a large-scale enterprise, nor may its prolicies be determined by a large-scale enterprise or by persons who are not its owners or employees. However, this requirement shall not preclude a small or medium-scale enterprise from accepting subcontracts from large-scale enterprises. For the purpose of this Ordinance, a large scaleenterprise is one that is neither a small-scale nor a mediumscale enterprise as defined in Subsections 3.2 and 3.3, respectively.

5.2.

Decrease of OFW Participation and/or Change in Scale. - Any registered enterprise that becomes a large-scale enterprise during its perriod of exemption, or in which OFW participation is reduced during the same period to a number or percentage less than that required to be registrable under Section 4 hereof, shall automatically lose its entitlement to the benefits granted by this Ordinance. Any such change in scale and/or decrease in OFW participation shall be reported, within thirty (30) days therefrom, by the enterprise concermed to the City Treasurer, which shall then cancel its Certificate of Registration.

SEC. 6. Fraud or Misrepresentation. - Any business entity found to have committed fraud or misrepresentation for the purpose of qualifying for the benefits hereunder shall be immediately disqualified as a beneficiary hereof and Its Certificate of Registration cancelled, without prejudice to the assessment and cotlection of back taxes for the period corresponding to its exemption, as well as to any administrative, criminal or civil liability under existing laws. SEC. 7. Non-Transferability. - The benefits provided in this Ordinance cannot be transferred to any person, association or business entity, irrespective of scale or OFW participation. SEC. 8. Cessation of Operations or Retirement of Business. - Any enterprise registered hereunder that retires or otherwise ceases its business operations shall thereupon be excluded from the coverage of this Ordinance. Within thirty (30) days therefrom the enterprise shall report the fact of such retirement or cessation to the City Treasurer, which shall then cancel the enterprise's Certificate of Registration. SEC. 9. Non-Exemption from other Taxes and Fees. - Nothing in this Ordinance shall exempt a registered enterprise from liability for any other tax imposed by law or ordinance. Neither shall such enterprise be exempt from the requirement of business permit and the payment of the appropriate fees therefor. SEC. 10. Information Dissemination. - The Manila Public Infonnation Office (MPIO) shall ensure the proper and adequate information dissemination of the contents and benefits of this Ordinance to the general public especially to its intended beneficiaries. For this purpose, the MPIO shall furnish a copy of this Ordinance to the Department of Foreign Affairs (DFA), the OWWA and the POEA. SEC. 11. Separability Clause. - If any provision or part of this Ordinance is declared invalid or unconstitutional by competent authority, the remainder or provisions not otherwise affected and dependent thereon shall remain valid and subsisting. SEC. 12. Repealing Clause. - Existing ordinance, orders or administrative regulations that are inconsistent with the provisions of this Ordinance. If any, are hereby amended, modified, superseded or repealed accordingly.

SEC. 13. Effectivity Clause. - This Ordinance shall take effect fifteen (15) days after its publication in The Official Gazette or a newspaper of
general circulation. This Ordinance was finally enacted by the City Council of Manila on March 26, 2013. PRESIDED BY:

MAR ON M. LACSON Presid nt Pro-Tempore and Acti g Presiding Officer City Council, Manila

LU
City Govern

GEM IS, JR.

ent Dept. Head 11I1 (Secretary a the City Council) ~

APPROVED BY HIS HONOR, THE MAYOR, ON APRIL 18, 2013

cr
ATTESTED:

A~LlMMayor /'

City of Manila

MoloJo-Apr.16,1013