DTI-6: Online barter allowed for ‘personal transactions’

By Joseph B.A. Marzan

 

Online barter system is legal for personal transactions only, Department of Trade and Industry (DTI) Regional Director Rebecca Rascon stressed on Wednesday.

Rascon reiterated the clarification of Trade Secretary Ramon Lopez on Wednesday following his previous pronouncements that the trade department will go after persons engaged in online exchange or online barter trading and that it should be subjected to tax.

According to Rascon, there is no need to regulate barter trades that are done via “personal transactions”.

Only those who are using online barter for “business” purposes must be regulated and should be required to register their business/company online.

“It is a verbal contract between two people, gin-agreehan nila duha. When the transaction is between two people, there is no need for regulation. But when it becomes a business, then that’s the time, we have to apply regulations because it will challenge properties, health, and safety,” Rascon told Daily Guardian on Wednesday.

Lopez announced on Tuesday that authorities will crackdown on online barter communities that are considered “illegal”.

The trade secretary emphasized that online barter transactions must be regulated and taxed.

His pronouncement set off an uproar in the online community with netizens clamoring how can the agency tax items and goods traded in a barter system.

In a statement on Wednesday, Lopez clarified that what he meant by illegal are barters done online and cross border; or done as a regular business in the course of trade.
Lopez said the above-mentioned acts are considered illegal as these are unregistered and untaxed.

“For local barter trade, while there is no clear prohibition, these are still subject to regulation and must be registered. 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. DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements,” he said in a statement on Wednesday.

According to the DTI, the barter system in the country is regulated under Executive Order (EO) No. 64 signed by President Rodrigo Roa Duterte in 2018.

Barter trade is only allowed in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi, the EO said.

DTI Iloilo provincial director Judith Degala said in an interview with Bombo Radyo Iloilo that there are no clear prohibitions in local online barter trading.

Degala said local barter trading is allowed, but if it becomes a business, it should be subject to a tax.

“But for local barter, like the one we have because it is trending here, not only in Iloilo but in other places as well because it has become popular, as a regular business, whether online or offline, there is no clear prohibition. But if it is a business, it has to be registered and subject to tax. Many of the barter [transactions] are personal [in nature] as we understand, this is allowed, there is no prohibition and it is not regulated, even online or offline.”

Degala said that if the persons doing barter transactions agree with each other, it “would be okay”.

“In personal barters, parties are allowed to enter such contracts, like an oral contract. Usually, the value of items bartered is the same, or even if they are not, as long as the parties agree, that is okay. Like, you may have baby dresses which your children have outgrown, you can barter that for some other goods which other interested parties have, like maybe grocery items or any items they want to exchange.”

Meanwhile, the famous online barter community IBACO or Iloilo Barter Community said they will abide by rules set by the DTI and other government agencies.

Charity Delmo, businesswoman and founder of IBACO said that while they are wary of the sudden pronouncements of the DTI, they will regulate the online community if needed and required by the laws.

“Whether we like to help our fellow Ilonggos sa current nga trying times, we cannot disobey whatever is written in the laws. We will abide,” Delmo told Daily Guardian.
Delmo added that they are doing their best to appease the fears of their members.

The founders are also looking for other “legal platforms” where Ilonggos can barter, especially in times of crisis.

IBACO, which started in May 2020, became an instant hit for Ilonggos who found the barter transactions more convenient, especially in the time of the COVID-19 pandemic.
Currently, the growing barter community has 42 affiliates all over the country with more than 250,000 members. (With a report from ERS)