THE MODERN-day barter trade is at stake. It may sound harsh especially that it is one of the things people are fond of during this time of pandemic.
Just recently, the Department of Trade and Industry (DTI) says online barter trade is illegal because the transactions are not subject to taxes. It says people must resort to regular transactions and pay corresponding taxes.
Some of our dear readers and even my friends are messaging me how their transactions will be taxed and if they are going to continue with such scheme.
Bartering is trading goods or even services with another person. There is no money involved. This has been around for a very long time, though it is not that people have relied solely on it for subsistence.
Today, bartering has made a comeback through the internet. There are online auctions or swap markets. These do not involve money. You can buy items by exchanging an item you have but no longer want or need.
What makes this illegal?
This trade is only allowed in certain areas. In our country, it is only allowed in limited places in Mindanao, namely Sulu and Tawi-Tawi. This is made legal under Executive Order No. 64 signed by President Rodrigo Duterte in 2018. The revival of barter in Mindanao creates more jobs and business opportunities. It also strengthens trade and commerce between and among the people in Mindanao.
The rules of the Bureau of Internal Revenue (BIR) state that value-added taxes (VAT) may be imposed on consumption through the “sale, barter, exchange or lease” of goods and services.
The law provides that all businesses, whether online or not, must be registered and taxed. In the case of barter, people engaged in this scheme as a form of business must pay taxes.
However, modern-day barter is not in a form of business because the transactions are personal in nature and not in the course of trade or business. There is no recognized gain or income – for example, when you exchange your precious succulent with a tray of eggs.
This practice may be regulated but not taxed. It can be regulated by prohibiting some goods that can be bartered like liquor, vapes, gambling materials, contraceptives, and other related things.
The reason this scheme came to life again is because of the pandemic; this made people stay at home and spend time to de-clutter things they do not need but beneficial to others. This is one of the ways people have resorted to, to alleviate hunger, poverty, joblessness, and even depression.
We need to be more sensitive.Let us not burden our fellow Filipinos or make them suffer more in this challenging times./PN
