August 25, 2021 08:27 UTC
August 25, 2021 08:27 UTC
The Philippine government is still observing whether Axie’s in-game NFTs should be classified as securities or currencies.
With the huge success of the cryptocurrency game Axie eternity in the Philippines, the Ministry of Finance of the government has made it clear that it hopes to reduce profits by enjoying games earned by Axie and other games.
An Inquirer report on August 23 quoted Antonette Tionko, the Deputy Secretary of the Department of Finance of the Philippines, as saying that any profits made by playing games are taxable.
“Cryptocurrency is an asset, so it is no longer exempted in the Philippines […] No matter who earns money from it, you must report its economic benefits,” she said.
Although the official claimed that the proceeds earned by the game “need to be taxed,” Tionko admitted that lawmakers still need to classify Axie’s in-game NFT or native tokens Smooth Love Potion (SLP) and Axie Eternity Shards (AXS)) as Securities or currencies.
She even believes that this matter should be decided by the local central bank and the Securities and Exchange Commission:
“Is it safe? Is it a currency? So these things will help us define the basis for taxation. However, regardless of its characteristics, it is taxable-taxable.”
Although SLP and AXS tokens are obtained through the eternal enjoyment of Axie, SLP is a game currency, and AXS is the governance token of the Axie community.
During the pandemic, the quality of “making money from games” has surged across the Philippines. As the value of encrypted assets is surging, this means that locals can earn honest economic benefits similar to local wages by enjoying the eternity of Axie.
Tionko also emphasized that Sky Mavis, the Vietnamese game studio that developed Axie Eternity, is not registered with the Philippine Tax Office, although it mainly receives financial benefits from Philippine sources.
“Once we have a registration system for non-residents, that is, those company forms that are not in the Philippines, this is one of the things we hope to capture.”
The news triggered commodity trading in the SLP market, and the token flickered with a maximum of 15% on August 24, and then closed with a drop of nearly 7%.
SLP has performed like a roller coaster in recent months. It suddenly surged by more than 900% from $0.035 on April 26, and hit a record high of $0.36 on May 2, which is consistent with CoinGecko.
Since then, SLP has fluctuated between approximately US$0.13 and US$0.35, and the market is currently down 60% from its original high in July.