Axie Infinity gamers must pay tax on gaming earnings, according to a Philippine regulator

• The local Department of Finance has made it clear that it wants a cut of profits generated by playing Axie and other play-to-earn games, despite the game’s enormous success in the Philippines
• She went on to say that the local central bank and the Securities and Exchange Commission should decide on the matter, whether it is a matter of safety or unit of account
• Tionko also pointed out that Sky Mavis, the Vietnamese gaming company behind Axie Infinity, is not registered with the Philippine Bureau of Revenue, despite earning money from domestic sources

The local Department of Finance has made it clear that it wants a cut of profits generated by playing Axie and other play-to-earn games, despite the game’s enormous success in the Philippines. According to an Inquirer report from August 23, Philippine Finance Undersecretary Antonette Tionko clarified that any profits earned through play-to-earn games are taxable. Because cryptocurrency is an asset, it is already taxable in the Philippines, anyone makes cash from it, it is income that must be reported, she explained. While the official stated that play-to-earn earnings are taxable, Tionko admitted that lawmakers have yet to determine whether Axie’s in-game NFTs or native tokens Smooth Love Potion (SLP) and Axie Infinity Shards (AXS) are securities or currencies.

She went on to say that the local central bank and the Securities and Exchange Commission should decide on the matter, whether it is a matter of safety or unit of account. So those are the factors that will help us determine the regulations for taxation. However, it is taxable, liable to income tax, regardless of how it is defined. While both the SLP and AXS tokens are acquired by playing Axie Infinity, SLP serves as in-game money, whilst AXS serves as the Axie community’s governance token. During the epidemic, play-to-earn games grew in popularity across the Philippines, with the rising price of crypto assets implying that residents might earn a comfortable living by playing Axie Infinity. 

Tionko also pointed out that Sky Mavis, the Vietnamese gaming company behind Axie Infinity, is not registered with the Philippine Bureau of Revenue, despite earning money from domestic sources. That is one of the things they want to capture once they have that system of registration for non-residents and non-Philippine corporations. The announcement prompted a sell-off in SLP markets, with the token falling as high as 15% on August 24 before finishing the day with a nearly 7% loss. According to CoinGecko, SLP has had a rollercoaster ride in recent months, unexpectedly rocketing by more than 900 percent from $0.035 on April 26 to a record high of nearly $0.36 on May 2. Since then, SLP has fluctuated wildly between $0.13 and $0.35, with the markets presently down 60% from their July high.

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.