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••••••••••••••••••••••••••••••••••••••••REGITLAR SESSION NO. 227

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Begun and held in the City Council on Thursday,the eight day of March, Two Thousand Twelve

ORDINAILCE 110.8320AN ORDINANCE GRANTING TAX INCENTIVES TO OVERSEASFILIPINO WORKERS INVESTING IN SMALL AND MEDIUM-SCALEBUSINESS ENTERPRISES IN THE CITY OF MANILA AND FOROTHER 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. BernarditoC. Ang, Hon. Dennis B. Alcoreza, Hon. Irma C. Alfonso-Juson, Hon. Don Juan "DJ" Bagatslng, Hon. Rafael P.Borromeo, Hon. Ruben F. Buenaventura, Hon. LoulsitoN. 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. RobertR. 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. MoisesT. t.lm, Hon. Nino M. dela Cruz, HON. MARIA SHEILAH H.LACUNA-PANGAN, Majority Floor Leader, HON. MARLONM. LACSON, President Pro-Tempore and Acting PresidingOfficer 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 invaluablecontributions of overseas Filipinoworkers to the national economy, andof the potential of small and medium-scale enterprises for employmentgeneration resulting in economic growth and a self-sufficient industrialfoundation for the City of Manila, it Is hereby declared a policy of the Cityto encourage overseas Filipino workers to establish or Invest in suchenterprises within the City of Manila by granting incentives and benefitsfor the same.

SEC. 3. Definition of Terms .• Whenever used in this Ordinance thefollowing terms shall mean.

3.1. "Overseas Filipino Worker (OFW)" - Any Filipino workingoverseas under a valid employment contract duly approvedby the Philippine Overseas Employment Administration(POEA), including seamen employed in internationalmaritime navigation: PROVIDED, That one whoseemployment overseas has ceased, by reason of expirationof such contract or otherwise, may be considered an OFWunder this Ordinance if the cessation took place not morethan one (1) year before the filing of an application for theregistration provided for in Section 4 hereof.

3.2. "Small-Scale Enterprise" - Any sole proprietorship,partnership or stock corporation engaged in any legitimatebusiness, industry and/or services, whose total assets havea value of not more than One Million Five Hundred ThousandPesos (PhP 1,500,000.00).

3.3. "Medium-Scale Enterprise" - Any sole proprietorship,partnership or stock corporation engaged in any legitimatebusiness, industry and/or services, whose total assets havea 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 areduly licensed by the government after having passed a governmentlicensure examination, in connection with the exercise of their profession,and (ii) juridical persons such as partnerships or corporations engagedin consultancy, advisory and similar services where the performance ofsuch 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, ownedby the enterprise and used for the conduct of its business,including those arising from loans but excluding theenterprise's principal office and the land on which it issituated.

SEC. 4. Registration and Issuance of Certificate. - Smallor medium-scale enterprises duly registered with the appropriategovernment agency and established in the City of Manila, after thepassage of this Ordinance by any of the following. may be registeredwith the City Treasurer: (i) sole proprietorships owned by an OFW; (ii)partnerships, more than fifty (50) percent of the capital of which wascontributed by one or more partners who are OFWs; and (iii) stockcorporations, more than fifty (50) percent of the outstanding capital stockof 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 ifsuch OFW was himself the owner of or a participant in another enterprisepreviously registered hereunder, and his participation therein had beenconsidered in determining that such previously registered enterprise metthe OFW participation required in the preceding paragraph.

Upon such registration, the City Treasurer shall issue a Certificateof Registration stating that the business entity is a duly registered smallor medium-enterprise, as well as the period of its exemption from thepayment of business tax as hereinafter provided.

A business address used by an enterprise registered hereunder maybe used again by another enterprise for the purpose of qualrfying for thebenefits of this Ordinance: PROVIDED, That at least one year shall havelapsed from the termination of the exemption of the former enterpriseand the latter enterprise shall have been established and duly registeredwith the appropriate government agency likewise at least one year aftersuch termination.

4.1. Documents to be Submitted. - To determine the qualificationand value of the assets of a business entity applying forregistration as a small or medium-scale enterprise, the City

Treasurer shall required the submission of the following I

documents:

a. Certificate from the POEA or the Overseas Workers WelfareAdministration (OWWA) that the persons seeking registrationhereunder of their business entity or enterprise are OFWsas defined in Subsection 3.1 of this Ordinance, or a copy oftheir overeseas employment contract duly approved by thePOEA;

b. Documents of registration as a business entity or enterpriseissued by the appropriate government agencies. such as theSecurities and Exchange Commission (SEC) for corporationsand partnerships and the Department of Trade and Industry(DTI) for sale proprietorships;

c. Taxpayer Indentification Number (TIN); andd. Sworn Affidavit executed by the sole proprietor, the managing

partner of the partnership, or the president of the corporationthat the total assets of the enterprise do not exceed the limitsset in Subsections 3.2 or 3.3 of this Ordinance.

In addition to the foregoing, the City Treasurer may require thesubmission of other perstinent documents, which may be reasonablynecessary to enable him to determine the qualification and total value ofthe assets of the business entity seeking registration.

SEC. 5. Exemption from Business Tax. - Upon registration, thesmall or medium-scale enterprise shall be exempt from the payment ofbusiness tax based on gross income for a non-extendible period of two(2) and three (3) years, respectively. This exemption is without prejudiceto any other benefit or tax exemption granted to the enterprise by law orany 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 mayits prolicies be determined by a large-scale enterprise or bypersons who are not its owners or employees. However,this requirement shall not preclude a small or medium-scaleenterprise from accepting subcontracts from large-scaleenterprises. For the purpose of this Ordinance, a large scale-enterprise is one that is neither a small-scale nor a medium-scale 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-scaleenterprise during its perriod of exemption, or in which OFWparticipation is reduced during the same period to a numberor percentage less than that required to be registrable underSection 4 hereof, shall automatically lose its entitlement tothe benefits granted by this Ordinance. Any such changein scale and/or decrease in OFW participation shall bereported, within thirty (30) days therefrom, by the enterpriseconcermed to the City Treasurer, which shall then cancel itsCertificate of Registration.

SEC. 6. Fraud or Misrepresentation. - Any business entityfound to have committed fraud or misrepresentation for the purpose ofqualifying for the benefits hereunder shall be immediately disqualified asa beneficiary hereof and Its Certificate of Registration cancelled, withoutprejudice to the assessment and cotlection of back taxes for the periodcorresponding to its exemption, as well as to any administrative, criminalor civil liability under existing laws.

SEC. 7. Non-Transferability. - The benefits provided in thisOrdinance cannot be transferred to any person, association or businessentity, irrespective of scale or OFW participation.

SEC. 8. Cessation of Operations or Retirement of Business.- Any enterprise registered hereunder that retires or otherwiseceases its business operations shall thereupon be excluded fromthe coverage of this Ordinance. Within thirty (30) days therefrom theenterprise shall report the fact of such retirement or cessation to theCity Treasurer, which shall then cancel the enterprise's Certificate ofRegistration.

SEC. 9. Non-Exemption from other Taxes and Fees. - Nothing inthis Ordinance shall exempt a registered enterprise from liability for anyother tax imposed by law or ordinance. Neither shall such enterprise beexempt from the requirement of business permit and the payment of theappropriate fees therefor.

SEC. 10. Information Dissemination. - The Manila PublicInfonnation Office (MPIO) shall ensure the proper and adequateinformation dissemination of the contents and benefits of this Ordinanceto the general public especially to its intended beneficiaries. Forthis purpose, the MPIO shall furnish a copy of this Ordinance to theDepartment of Foreign Affairs (DFA), the OWWAand the POEA.

SEC. 11. Separability Clause. - If any provision or part of thisOrdinance is declared invalid or unconstitutional by competent authority,the remainder or provisions not otherwise affected and dependentthereon shall remain valid and subsisting.

SEC. 12. Repealing Clause. - Existing ordinance, orders oradministrative regulations that are inconsistent with the provisions ofthis Ordinance. If any, are hereby amended, modified, superseded orrepealed accordingly.

SEC. 13. Effectivity Clause. - This Ordinance shall take effect fifteen(15) days after its publication in The Official Gazette or a newspaper ofgeneral circulation.

This Ordinance was finally enacted by the City Council of Manila onMarch 26, 2013.

PRESIDED BY:

MAR ON M. LACSONPresid nt Pro-Tempore and

Acti g Presiding OfficerCity Council, Manila

LU GEM IS, JR.City Govern ent Dept. Head 11I1(Secretary a the City Council) ~

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

A~LlM-Mayor /'cr City of Manila

ATTESTED:

MoloJo-Apr.16,1013