The Philippines’ undersecretary of finance clarifies that winnings from games like Axie Infinity are subject to income tax. He further said it is unclear whether Axies can be considered securities.
Philippine Finance Undersecretary Antonette C. Tionko said that winnings from non-fungible, cryptographic token-based games like Axie Infinity
are subject to income tax.
The Manila Times media reported the news, saying that Tionko revealed that the Department of Finance and the Bureau of Internal Revenue (BIR) were examining Axie Infinity
Also, Tionko said it was unclear if Axies, the name of the game’s mascots or characters, were a security. However, regardless of whether it is a security, she believes it is subject to income tax. She also pointed out that Sky Mavis, the creator of Axie Infinity,
has not registered with the Bureau of Internal Revenue, BIR, the Philippine government’s tax agency.
Referring to this registration and the fact that the company’s income came from Philippine sources, Tionko said
“He’s not registered in the Philippines. That’s one of the things we hope to capture once we have that registration system for non-residents. It’s not in the Philippines, but certainly, whoever makes money from it, they should report it.”
Tionko also hinted that other sources of income would be taxable. So far, the Philippines has taken only limited steps to regulate the market, Beincrypto
To counter these problems, some governments are banning some assets, such as non-fungible tokens, NFTs, altogether. In June this year, for example, Thailand’s Securities and Exchange Bureau banned NFTs and meme tokens, such as Dogecoin
For its part, the Thai government has also been targeting another sector in the for-profit space, Decentralized Finance, DeFi
Axie and its profits
Axie Infinity has become one of the most popular Blockchain games in recent months, generating good profits for many of its players. The AXS
token has skyrocketed in value, as have the overall prices in the game itself.
The game is popular in the Philippines and South Asia, where people eagerly raise and “battle” their Axies to earn rewards, Beincrypto recounts. But it also has a lot of fans in Latin America, especially in Venezuela and Argentina. Many of them, who
they can’t buy their own Axies, they play on scholarship. Two days ago our editor Angel Di Matteo told his experience playing Axie on scholarship.
According to Beincrypto, it is possible that other governments may take tax measures on this and other similar games, seeing the amount of profits that some people can get with them. Still, for many, it is preferable to pay taxes than to have them banned. However, for others, paying taxes would significantly reduce their profits.
Axie game image