A regulatory body in the Philippines wants users of the popular NFT-based online video game Axie Infinity to pay taxes on their earnings from the game. The platform has gained a lot of traction in recent weeks, but the Philippines’ finance undersecretary, Antonette C. Tonko, stated that the revenues from online gaming platforms are subject to income tax and that players must disclose them for taxation.
According to the Manila Bulletin, the government of the Philippines has yet to decide whether Axie’s in-game NFTs should be classified as securities or cash. Despite conceding that the Securities and Exchange Commission [SEC] and the Bangko Sentral ng Pilipinas [BSP] lack clarity in terms of categorization, the official went on to say,
“However, it is taxable and liable to income tax, regardless of how it is described.”
Axie Infinity, an NFT-based company, has had a sporadic ascent in the Philippines.
According to the player tracking platform Player Counter, the Philippines is Axie Infinity’s largest market, with over 40% of its players based there, followed by Venezuela, the United States, Thailand, and Brazil. Axie Infinity, a game developed by Sky Mavis in Vietnam, was a huge hit during the NFT craze. Last week, the platform surpassed an all-time high in sales of $1 billion, setting a new record as the world’s most valuable NFT project.
Axie Infinity also has two tokens: Smooth Love Potion [SLP] and Axie Infinity Shard [AXS], which may be obtained by playing the game. While SLP is used as in-game currency, AXS is used as the Axie community’s governance token.
Even if the platform is not based in the Philippines, Tionko, who heads the DOF’s Revenue Operations Group, argues that it still generates revenue from local players and that with the expansion of the broader bitcoin industry players incomes are becoming equal to local wages. “She said,” she explained.
“It isn’t registered in the Philippines,” says the author. That is one of the things we expect to capture once we have the non-resident registration system in place. Although it is not in the Philippines, anyone who earns money through it should report it. Remember the taxes principle: it’s a flow of wealth.”
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