Taxing online barter not worth the enforcement, says Salceda

As far as House Committee on Ways and Means chairperson Joey Salceda is concerned, imposing taxes on barter trade is "not worth the enforcement effort," especially at this time that the country is still faced with the COVID-19 pandemic.

Salceda made the remark on Wednesday amid the proliferation of online trading, prompting Trade Secretary Ramon Lopez to remind the public that the activity is illegal as it violates tax laws.

The social media group engaged in the barter stressed the transactions do not involve cash.

Salceda, an economist, said that instead of imposing taxes on barter-trading, he would rather focus on "plugging tax loopholes" exploited by big business.

"I do not see a scenario where the tax collection from barter trade will be worth the enforcement and tax administration costs," he said.

"This is a crisis, and DTI probably has much more important things to do, such as guard price movements and provide credit support for businesses, than crack down on something so elemental to human nature and probably harms no one in any meaningful way," he added.

Salceda said he considers three filters in determining if a tax policy is worth pursuing or not.

"If tax policy promotes or preserves economic growth, taxes the rich much more than it taxes the poor (if it taxes the poor at all), collects more than enough to cover enforcement, and promotes some greater good, then I will pursue it," he said.

"Enforcing taxes due from barter trade fails this filter, and appears to me to be not worth the enforcement effort, especially in this time of a pandemic, where people are cash-strapped," he added.

During the Laging Handa public briefing on Tuesday, Lopez said that while barter-trading --- where goods and services are exchanged without using money --- is allowed in “very limited” areas in Mindanao, it is not legal in the rest of the country.

“Ang barter trade ho ay allowed po iyan doon po sa mga limited places sa Mindanao dahil po sa nature po ng … iyong mga lugar doon na kailangan ma-improve iyong livelihood, iyong mga hanapbuhay po lalo na sa tabi ng dagat,” he said.

“Pero po sa ibang lugar ay hindi po allowed iyong barter trade. At saka kailangan ho, ano pa, iyong regular transaction tayo diyan at saka dapat ho ay may tax na binabayaran,” Lopez added.

However, he clarified on Wednesday 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.—LDF, GMA News