DTI clarifies advisory on online barter trade

The Department of Trade and Industry on Wednesday clarified that barter on online platforms is unlawful, except in areas where the trade is allowed by an executive order.

“Barter is the world’s oldest form of trade and is regulated under Executive Order No. 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,” said Trade Secretary Ramon Lopez.

He said the EO stressed barter trade is only allowed in three areas, including Siasi and Jolo in Sulu and Bongao in Tawi-Tawi. Outside those areas, barter trading across borders is not allowed, he said.

Lopez said what the Trade Department described as illegal are those done in other areas, online and cross border or as a regular business in the course of trade, as these are not registered and not taxed.

He said for local barter trade, while there is no clear prohibition, these are still subject to regulation and should be registered. The Trade Department said barter is subject to tax when practiced in the course of regular trade or business.

Local barter trade activities with less than P3 million in gross sales per year may avail of value added tax exemption.

Lopez called on merchants to practice legitimate methods of transaction and pay the corresponding taxes.

The department clarified that personal transactions not meant for business engagement or trade were not covered by registration requirements.

The department, with assistance from the Philippine National Police and the National Bureau of Investigation, vowed to look into cases of illegal barter trade.