Philippines’ regulatory entity wants the players of the popular NFT-based online video game, Axie Infinity players to pay taxes on income generated from the game. In recent weeks, the platform has garnered significant traction but the’ finance undersecretary of the Philippines, Antonette C. Tionko said that the earnings from these gaming platforms are subject to income tax and players are required to report them for taxation.
According to the report by the Manila Bulletin, the country’s government has not yet determined whether Axie’s in-game NFTs be deemed as securities or currency. Despite admitting to the lack of clarity in terms of categorization by the Securities and Exchange Commission [SEC] as well as the Bangko Sentral ng Pilipinas [BSP], the official went on to state,
“But regardless of how it is characterized, it’s taxable, subject to income tax.”
The sporadic rise of NFT-based Axie Infinity in Philippines
According to the tracking platform, Player Counter, the Philippines happens to be the largest market for Axie Infinity, with more than 40% of its players located the country followed by Venezuela, United States, Thailand, and Brazil. Developed by Vietnam-based studio Sky Mavis, Axie Infinity saw enormous success riding the wave of NFT mania. Last week, the platform touched an all-time high in sales of $1 billion and established a new record, emerging as the highest valued NFT project in the world.
Besides, there are two tokens that can be earned through playing Axie Infinity- Smooth Love Potion [SLP] and Axie Infinity Shard [AXS]. While SLP works as in-game currency, AXS, on the other hand, is the governance token of the Axie community.
Tionko, who heads the DOF’s Revenue Operations Group argued that even though the platform is not based in Philipinnes, it is still generating income from players based within the country and with the rise in the broader cryptocurrency market, players’ earnings becomes comparable with local wages. She said,
“It is not registered in the Philippines. That is one of the things that we hopefully capture once we have that system of registration for non-residents. It’s not in the Philippines, but certainly, whoever earns currency from it, you should report it. Remember the principle of taxation, it’s a flow of wealth”