Oct 26, 2020

DTI Palawan clears ‘barter trade’ controversy

The DTI issued the clarification as concerns were raised among online barter communities when trade secretary Ramon Lopez recently remarked that barter trading is illegal.

(Photo courtesy of Baby Gie/ File photo)

 

Barter trading as they are commonly done during the quarantine period are “legal” and will not be taxed by the government, the Department of Trade and Industry (DTI) clarified Thursday.

Officer-in-charge (OIC) provincial director Hazel Salvador, in an interview with Palawan News, noted that many provinces have resorted to barter trading to cope with the challenges brought about by the pandemic.

The DTI issued the clarification as concerns were raised among online barter communities when trade secretary Ramon Lopez recently remarked that barter trading is illegal.

In a statement released July 15, the DTI clarified that Lopez was referring to barter activities that are done across the country’s borders or those that are done as a business model or enterprise.

“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.

Personal transactions that are not considered as trade and business transactions are not covered by registration requirements, and is, therefore, not subject to tax, the statement said.

“Itong online barter, umusbong siya, kumbaga nauso siya dahil sa pandemic. Hindi lang sa Palawan, kahit saang probinsya sa MIMAROPA maraming nag-o-online barter na talaga,” Salvador said.

“Ang stand lang ng DTI is if you do it for personal use, walang problema. Karamihan ginagawa ‘yan para maka-cope up sa hirap na dinanas natin dahil sa pandemic,” she said.

Salvador said that people joined barter communities to exchange their used items such as shoes, bags, or clothes for food or anything consumable to cope with the effect of the health crisis.

However, if the item got from barter trade will be sold for a higher price, the seller must secure registration from DTI, she said.

She said that if the transaction turned into a business and the person involved is starting to earn on any type of business, this must be registered under DTI to be legal.

“If you are having a business, if you are doing it for business, ikaw ay nagne-negosyo, ikaw ay kumikita, doon pumapasok ang mga batas,” she said.

The business owners must be compliant with business name registration in DTI, mayor’s permit in local government unit (LGU), and tax to pay in Bureau of Internal Revenue (BIR).

Salvador stressed that the concept of barter trade is goods to goods exchange and there is no money involved.

“Kapag personal use, ang stand namin sa DTI is hindi siya illegal, okay lang siya. Pero kung gagawin na siya for business like for example, nag-barter ka tapos binarter mo, usually the same amount lang ‘yan or kung lalampas man ang value nya ay depende na sa usapan niyo,” she said.

“Pero kung ang nakuha mo na kapalit, ka-barter mo, ibinenta mo na nang mas mahal, ‘yon na iyon. Doon na pumapasok ang sinasabi ng DTI na if you are doing it for business, dapat magparehistro ka,” Salvador added.

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