THE Department of Trade and Industry (DTI) has clarified that personal barter transactions are allowed.
In a statement released Wednesday, July 15, Trade Secretary Ramon Lopez said only those online business barter transactions are prohibited by law.
“This is what I meant as illegal—those done in other areas or if done online and cross border, or as a regular business in the course of trade—as these are not registered and not taxed...On the other hand, the DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements,” Lopez said.
The DTI chief’s pronouncement that barter trade is illegal and should be taxed became a trending topic online, Tuesday, June 14.
“That is not allowed and they are violating tax laws there,” said Lopez, in a national report, adding that the agency will go after people in the online barter trade.
In trade, barter is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.
Subject to tax
“For local barter trade, while there is no clear prohibition, these are still subject to regulation and must be registered. The DTI emphasizes that this is subject to tax if it is being done in the course of regular trade or business. This is also applicable for online transactions. However, local barter trade activities with less than P3 million gross sales per year may avail of value added tax exemption,” Lopez explained.
According to the DTI, barter is the world’s oldest form of trade and is regulated under Executive Order 64 signed by President Rodrigo Roa Duterte in 2018. The EO also established the Mindanao Barter Council, tasked to supervise and coordinate barter activities in the Philippines.
This EO stresses that barter trade is only allowed in three areas, namely in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi.
Outside those areas, barter trading across borders is not allowed.
Regor Lee Suganob, an administrator of the Bantayan Island Barter Community, said the community was shocked since they don’t involve money in their bartering.
“Filipinos are looking for ways to survive in this pandemic because they don’t have income and the means to a livelihood is scarce. Because they can’t buy food through cash, they barter unused or pre-loved things in exchange for it,” Suganob said.
For Paula Viegelmann-Ruelan, assistant vice president for reputation and brand management head of City Savings Bank, bartering is a “personal transaction between two individuals and the value of items bartered is subjective since its based on the need of the two agreeing parties.”
“Most items bartered are basically either pre-loved or brand-new but have no use for the existing owner. That’s why they want to exchange it for something else they can use, while for others it’s a way for them to give back and they do this out of the goodness and kindness of their hearts,” she told SunStar Cebu.
Ruelan said the bartering community flourished as a creative way for Filipinos to cope during this pandemic.
“Imposing taxes kills this creativity, and right now, bartering is a way for a lot of people to de-stress and see a silver lining amid the challenges,” she said.
She added that bartering was her way to connect with people whom she didn’t even know at first, and she was able to reconnect with friends with whom she shares the same passion.
“It was also a good way to find out how one’s unused item can be a useful and valuable item for another person. It was also a good reason for me to declutter and assess if an item still brings joy to me or even to my son, and if it’s time to let go of it already and let someone else find joy in it,” she said.
She said some of her most memorable barters include her son’s violin for a portable microphone, a pre-loved Samsung Galaxy Tab A in exchange for a pre-loved PS3 gaming console and lastly, a pre-loved megablock toy in exchange for a brand-new rice cooker.
The Cebu Barter Community, which is a 250,000-strong community, in an earlier interview, said the practice gave the community hope through people’s kindness and generosity during these depressing times.
From clutter to treasure
Bong Abela, president of the Cebu Barter Community, attested that the page activated the response for every person’s basic needs. He said someone’s clutter may be another person’s treasure.
“It’s really uplifting. You are able to declutter and at the same time, satisfy your basic essentials,” he said.
The page is also not new to stories that warm one’s heart, may it be a mother bartering sweet potato for groceries for her children or someone trading a bed in exchange for a prayer.
It also paved the way for persons who need to earn a living to offer their services in exchange for groceries or food like aircon installation or even an artwork commission.
“Some people also became friends through the platforms. Mothers supporting other mothers and they build their friendship through the platform. They exchange information and day-to-day coping in life,” he said.
The Cebu Barter Community temporarily stopped its bartering activities from June 16 to promote the safety of its community and to help the local government address the rising cases of Covid-19 in Cebu City.
Cebu City was placed under a stricter lockdown from June 16 to July 15.