Axie Infinity players in the Philippines may have to start paying tax on trading ‘pets’
Axie Infinityreportedly become a way for people in the Philippines to earn money after losing their jobs during the COVID-19 pandemic.
- The NFT-based game works on the play-to-earn model, which means players can convert their tokens in real-life money and provide for their families.
- The Philippines is home to the largest number of Axie Infinity players, and the local government now wants to tax their income.
AdvertisementAxie Infinity, a game where players can trade, train and battle their ‘pets’ — and earn some money along the way — has come on the radar of the Philippines' government. The regulators now want to tax the gains made by gamers.
“Cryptocurrency is an asset, so it’s already taxable in the Philippines… Whoever earns currency from it [Axie Infinity], it’s income you should report it [sic],” Philippine’s Finance Undersecreatte Antonette Tionko told the Inquirer.
Axie Infinity has reportedly emerged as a popular way to pass the time for the citizens of the Philippines amid the COVID-19 pandemic. Its ‘
The largest swath of gamers on the platform come from the island nation — a little more than 40% — according to the powerhouse behind Axie Infinity, a Vietnamese startup called Sky Mavis.
What will the new tax mean for gamers in the Philippines?
Nobody really knows what the new tax will mean for Axie Infinity gamers. On the one hand, a tax seems justified wherever any income is being made. On the other hand, regulators don’t really know ‘what’ to tax — does one tax the actual NFTs or the in-game
For those who aren’t familiar with the game, the NFTs are the adorable Pokemon-like ‘pets’ - called Axies — in the game. Users can train them, upgrade them, and have them battle other pets.
The tokens are a whole other deal and there are two — Axie Infinity Shards (AXS) and Small Love Potion (SLP). AXS is sold on crypto exchanges like Coinbase. Users can buy AXS using normal currency or exchanging other cryptocurrencies. According to Sky Mavis, the native token will serve as a governance token in the future, allowing holders to have a say in the game’s development.
SLP, on the other hand, is given to players for spending time in the game. A player can earn these tokens by completing in-game quests and battling other Axies. The more a person plays the game, the more SLP they’re likely to have in the bank.
AdvertisementThe two cryptocurrencies are important because they can be used to ‘breed’ new Axies — the only way to create new pets.
The decision on whether it will be the ‘pets’ getting taxed or in-game token will most likely be determined by the central bank or the country’s Securities and Exchange Commission (SEC), according to Tionko. And, it doesn’t make things easier that the game’s developer, Sky Mavis, is not currently registered with the Bureau of Revenue despite generating income from Filipino people.
“Is it a security? Is it a currency? So those are the things that will help us define the rules on how it should be taxed. But regardless of how it is characterized, it’s taxable — subject to income tax,” he told the Inquirer.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
Iran is bringing back cryptocurrency mining, but China shows no signs of changing its mind
After Ethereum, Cardano is set to get an update — and here's how that will change things for the cryptocurrency
- Bengaluru cafe blast: Karnataka CM Siddaramaiah to chair meeting with top police officials today
- India retains full policy space for benefit of farmers, fishermen at WTO: Goyal
- Sensex, Nifty settle at new closing high levels in first part of special live trading session
- Passive Income Streams
- Gas stoves create more nanoparticle pollution than a busy street with diesel and gas cars, study finds