No (Tax) Breaks: Pinoy online barter deals illegal, says Trade Dep’t

<i>Film grab from Year One. Photo for illustration purposes only via Columbia Pictures / IMDB</i>
Film grab from Year One. Photo for illustration purposes only via Columbia Pictures / IMDB

It looks like going after Pinoy online businesses and nudging them to pay taxes during a pandemic wasn’t enough.

Now bartering, or the practice of swapping goods and services, has been declared illegal by the Department of Trade and Industry (DTI) because it allegedly violates Philippine tax laws.

Noting the boom of trading in online barter communities during the lockdown, DTI Secretary Ramon Lopez warned in yesterday’s press briefing that while barter deals are allowed in “limited” areas in Mindanao, it’s illegal elsewhere in the country.

Lopez said that this is because of Executive Order No. 64, signed by President Rodrigo Duterte in 2018, which revived and institutionalized barter trade in Sulu and Tawi-Tawi.

“Barter trade is allowed in limited places in Mindanao because of the nature of [their work] because those places need to improve on their livelihoods, especially those who work by the sea. [B]ut in other areas barter trade is not allowed. We need to implement a regular [cash or credit-based] transaction, and we need to pay taxes [in these transactions],” Lopez explained in English and Filipino.

Read: Malacañang backs plan to tax Pinoy online businesses despite criticisms

The trade secretary said a crackdown on online trading and its alleged tax violators will follow immediately.

“It’s prohibited, and they have violated the tax laws because of that. Anyway, we will have it tracked down because it’s an illegal activity. Our composite team from the DTI and the PNP [Philippine National Police], NBI [National Bureau of Investigation] is taking action,” said Lopez.

However, he said that while there is a rise in online trading, his department has yet to receive any customer complaints coming from the transactions.

“We’ve received a lot of complaints [at the DTI] but not on barter. But in general, online complaints [have increased] from 1,000 to 10,000 [since] January this year. That’s how big the jump has been in online selling transactions during the height of the quarantine period,” he added.

As expected, the sudden crackdown on an apparently harmless venture (no complaints on bartering, right secretary?) pissed off a lot of Pinoys online, who pointed that it’s a good alternative for cash-strapped Filipinos who are already having difficulty digging through their pockets because of the pandemic.

Users like @ultwomen for one, tweeted, “Imagine calling barter trade illegal, these boomers were probably asleep during Civics and Culture forgetting that it was our ancestors who survived using that form of trade.”

“[B]arter existed way before DTI was even established,” she said.

Lawyer @ralph_calinisan pointed out that bartering “is not illegal” and added that taxing it is inconsiderate.

“Why are we hell-bent in taxing even the smallest transactions? This is insensitive and another step in the wrong direction,” he said.

“PH Dept of Trade and Industries: Barter trade is illegal. Bitch please resign. All of you,” said outraged @KoreLaii.


Are you in any online barter groups? What do you think about all of this? Sound off in the comments below or tweet us @CoconutsManila.

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