DTI allows barter for personal transactions

File photo
File photo

THE recent statement of the Department of Trade and Industry (DTI) Secretary Ramon Lopez that online barters are illegal and must be taxed drew flak from the online barter community in Davao City. But the trade officials clarified it was a misinterpretation.

The online Davao Barter Community Official (DBCO), whose members have been successfully exchanging goods during the periods of community quarantine, opposed the idea that barter is illegal.

"Upon discussion, research, and consultation with friends from the legal profession, we at DBCO respectfully beg to disagree especially in the absence of a specific law and clear cut guidelines on the matter," it said in a statement.

It also cited Article 1638-1641 of the Civil Code of the Philippines, which allowed barter as a medium of exchange between two contracting, consenting parties.

DTI-Davao Region Director Ma. Belenda Q. Ambi clarified that the pure exchange of personal items is not subject to tax, quoting words from secretary Lopez.

"Giclarify pud ni secretary nga if personal transaction like nakipagbarter lang sa imong neighbor or sa imong friends sa usa ka product and another product, dili na na siya considered by the Barter Law (Secretary Lopez clarified that if you only exchange a product with your friends or neighbors, it is not prohibited under the Barter Law)," she said.

"Ang dili lang namo icover is katong pure barter. Exchange lang gyud. No cash involved. Goods to goods, services to services, services to goods. If it involves cash, then it is covered already. Dili na na sya considered barter. Cash transaction na na (We do not cover pure exchanges of items. If it involves cash, then that is subject to tax and other regulations)," she added.

Ambi further emphasized that it is the buying and the selling of products online that are subject to tax and must be registered.

In a separate statement, Lopez clarified that what was deemed illegal is the barter trade in other areas in the Philippines except in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi.

This is based on the Executive Order (EO) 64, or the revival of the barter trade in Mindanao to promote growth and development signed by President Rodrigo Duterte in 2018.

Barter trade in this context also meant the import and export of goods between some Southeast Asian nations that have a long history of barter trade.

Section 5 of the EO states that "goods traded under the barter system shall enter Philippine territory only through Barter Ports established for the purpose."

The barter ports identified are the ports of Siasi and Jolo in Sulu and Bongao in Tawi-Tawi.

"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," Lopez said in a statement.

"For local barter trade, while there is no clear prohibition, these are still subject to regulation and must be registered," he added.

He emphasized 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" but online sellers with less than P3 million gross sales per year may avail of value-added tax (VAT) exemption.

Meanwhile, the DCBO said in the absence of regulation on the pure exchange of goods and services, they will continue with their activities to serve the people of Davao.

"We believe that bartering, especially in these most trying times, has helped a lot of our ka-DABAWters -- the very essence of this group -- 'Davaoeño para sa Davaoeño'," the statement read.


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