Senators chide DTI for frowning upon online barter trade

Senators chided on Wednesday, July 15, the Department of Trade and Industry (DTI) for saying that online barter trade is illegal and violates tax laws.


Senate President Pro Tempore Ralph Recto, in a statement, said the DTI should "barter that off-the-cuff statement with common sense" as he questioned how such a scheme could be deemed illegal.

"When you exchange a tax-paid shirt too small for you for tax-paid shorts too big for your friend, where is the revenue loss for the government?" he asked.

"Where is the harm to the economy in a farmer swapping his pig for a secondhand computer for his child’s use, unlike the clear sabotage done by smugglers who bring in pork cuts by the boatload?"

Recto said he believes that online barter does not violate laws, likening it to the trade being practiced in rural communities where money is the medium of exchange.

"To survive the economic crunch of the lockdown, people are bartering unused and surplus household items, not to monetize them, but for goods they need. Previously loved items are being ‘re-homed’...Dresses which the pandemic have made too small or too big are being bartered for food ingredients such as flour, as many of our people have to turned to baking—not to get rich, but to get by," Recto said.

"Or simply to fight boredom. This is why 'plant exchanges' by 'plantitas' are blooming in Viber groups. Kulang na nga ng isang channel sa TV, pakikialaman mo pa (ang) cactus nila?" he added, alluding to the government's recent shut down of major broadcast network ABS-CBN.

In an online interview with reporters, Senator Joel Villanueva also raised his eyebrows over the DTI's pronouncement.

"Parang pinagdiskitahan na naman yong mga online sellers (Online sellers are being singled out). You know, I’m unable to comprehend why the DTI is coming after Filipinos who have resorted to barter trade to survive. How can we tax people who are desperately trying to survive in this pandemic?" he said.

Villanueva said the government, not only the public, should help and also adjust to the demands brought about by the COVID-19 pandemic.

Recto said the instead of the modern barter trade, tax collectors should go after offshore gaming operations that were proven to have violated tax laws.

Bartering, or the exchange of goods and services, has also shifted online due to the imposition of the community quarantine amid the coronavirus outbreak. Social media is widely used for this trade.

During the Laging Handa public briefing on Tuesday, Trade Secretary Ramon Lopez, however, said that barter trade is only legal in specific areas in Mindanao, citing an executive order issued by President Duterte in 2018. He said the government will crack down on those involved in bartering online.

On Wednesday, Lopez clarified that personal exchanges online are not covered by the supposed prohibition.

He maintained, though, that online barter done as a regular business should still be regulated, registered and taxed. Online barter earning less than P3 million a year are exempted from value-added tax.