By | July 15, 2020
DTI Secretary Ramon Lopez on online barter trade.

After receiving backlash for saying that online barter trade is ‘illegal’, Department of Trade and Industry (DTI) Secretary Ramon M. Lopez clarified his statement saying that exchanges of goods for personal transactions, not as business, is allowed.

In his statement posted online, Lopez said that what he referred to as illegal barter transactions are those done “as a regular business in the course of trade.”

“DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements,” Lopez said.

Lopez also cited Executive Order (EO) No. 64 signed by President Rodrigo Roa Duterte in 2018 which regulates barter. The EO 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 (3) areas, namely in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi. Outside those areas, barter trading across borders is not allowed,” Lopez 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 added.

Lopez further explained that while there is no clear prohibition for local barter trade, the activity is still subject to regulation and must be 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. This is also applicable for online transactions,” he said.

Local barter trade activities with less than Php3 million gross sales per year may avail of value added tax (VAT) exemption.

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