DTI secretary clarifies barter legal if it’s personal transaction

DTI Secretary Ramon Lopez clarified Wednesday barter could be allowed if it is done as a personal transaction and not as a regular business.

“Personal transactions not in the course of trade and business, are not covered by registration requirements,” Lopez told GMA News Online.

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Lopez, in a text message, said barter-trading (where goods and services are exchanged without using money) is legal only in three areas, namely in Siasi and Jolo, Sulu, and Bonggao, Tawi-Tawi under Executive Order No. 64 issued by President Rodrigo Duterte in 2018.

The executive order created the Mindanao Barter Council, which is responsible for supervising and coordinating barter activities in the country.

“Outside those areas, barter trading across borders is not allowed,” Lopez said.

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“This is what I meant as illegal, if done in other areas, or if done online and cross border and as a regular business, in the course of trade and not registered, not taxed,” he said.

However, the DTI chief clarified that while there is no clear law for local barter, the activity is still subject to regulation and must be registered and subject to tax “if again being done in the course of trade or business as a regular business.”

“And this is applicable also for online transactions. [It’s] VAT (value-added tax) exempt if less than P3 million gross sales per year,” he said.

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Also read: How to Register Online Business under BIR

Lopez earlier said then said the government would implement a crackdown of those engaging in illegal online barter trading.