DTI chief clarifies barter-trading allowed if it’s a personal transaction

Trade Secretary Ramon Lopez on Wednesday clarified that while online barter-trading is deemed illegal, it can still be done personally as long as it is not in the course of a regular business.

“Personal transactions not in the course of trade and business, are not covered by registration requirements,” Lopez told GMA News Online.

This, after Lopez said that the prevalence of barter-trading online amid month-long community quarantine is illegal as it violates tax laws. 

In a text message, Lopez said that barter-trading — where goods and services are exchanged without using money — is allowed only in three areas namely in Siasi and Jolo, Sulu and Bonggao, Tawi-Tawi pursuant to Executive Order No. 64 issued by President Rodrigo Duterte in 2018.

The order established the Mindanao Barter Council, which is tasked to supervise and coordinate barter activities in the Philippines.

“Outside those areas, barter trading across borders is not allowed,” Lopez said.

“This is what I meant as illegal, if done in other areas, or if done online and cross border and as a regular business, in the course of trade and not registered, not taxed,” he said.

However, Lopez clarified that while there is no clear prohibition for local barter, the activity is still subject to regulation and must be registered and subject to tax “if again being done in the course of trade or business as a regular business.”

“And this is applicable also for online transactions. [It’s] VAT (value-added tax) exempt if less than P3 million gross sales per year,” he said.

Trade Undersecretary Ruth Castelo echoed the DTI chief’s remarks.

“Yung sinasabi ni Sec. Lopez na illegal, if it is done in the course of business, kailangan mo pa ring irehistro ‘yung iyong barter o yung business dahil merong taxes na kasama yon. You import goods tapos iba-barter mo dito o ite-trade mo dito, talagang kailangan nilang mag-register. But that’s exempt pagka ang gross receipts mo ay P3 million and below,” Castelo explained.

“Pag may money na, na involved, kailangan registered na siya,” she added.

But Castelo stressed that those trading personal items online need not register. “If it’s personal like example second hand items, personal items that you would trade with your friends or within a community, that’s allowed,” she clarified.

“Hindi naman siguro ito tipo na magiging long-term business ng mga tao. Siguro temporarily while we are in this crisis also, it’s going to be helpful,” Castelo added.

Castelo also said they have around 2,500 personnel working from home who are monitoring online transactions daily.

“That’s going to be part of their accomplishment reports daily, yung monitoring ng mga not only those bartering or trading but also those selling via the internet or via online without the proper registration,” she said.

The DTI and the Securities and Exchange Commission have a list of registered businesses so Castelo said it would be easy to identify those illegally trading online.

Lopez then reiterated that personal transactions, such as barter-trading as long as it is not done as a regular business or trade are allowed and not covered by registration requirements. — with Tina Panganiban-Perez/RSJ, GMA News