A day after receiving widepsread criticism for saying barter transactions on the internet are illegal, Trade Secretary Ramon Lopez said such transactions were lawful as long as these were done personally and not performed as part of a business.
In a statement on Wednesday, Lopez said bartering, which he described as “the world’s oldest form of trade,” was “regulated under Executive Order (EO) 64 signed by President Rodrigo Roa Duterte in 2018.”
The order, he added, “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,” the Trade chief said.
“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,” he explained.
According to the official, while there is no clear prohibition for local barter trading, these are still subject to regulation and must be registered.
“The Department of Trade and Industry (DTI) emphasizes that this is subject to tax if it is being done in the course of regular trade or business,” Lopez said, adding that this also applied to online transactions.
He emphasized, however, that local barter trade activities with gross sales of less than P3 million a year may avail of exemption from value added tax (VAT).
“DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements,” Lopez said.