Authorities in the Philippines are now researching how to set up a registry for play-to-earn games in order to capture the country’s burgeoning cryptocurrency market.
According to Finance Undersecretary Antonette Tionko, regulators are evaluating how they can set up a registration system for non-resident foreign firms like Axie Infinity in order to collect taxes from their activities.
She claimed that the Bureau of Internal Revenue (BIR) has yet to establish a registry through which it can compel non-resident foreign corporations to report their earnings and pay their taxes.
“We (Axie) looked into it, and the BIR looked into it, and they sent us a report,” she said. It appears to be a non-resident foreign corporation that is not registered in the Philippines, according to Tionko.
“That is one of the things that we hope to capture once we have that registration system in place for non-residents and those types of businesses,” she said.
Tionko reminded play-to-earn game subscribers that whatever they earn from cryptocurrency platforms must be reported as income and taxes must be paid.
According to the finance official, the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) must determine what types of transactions occur in play-to-earn games in order for the BIR to determine the taxes that will be levied against them.
“When you get down to the nitty-gritty, a lot of it will come down to characterization, which I believe will be decided by the SEC and BSP. Is it a matter of safety? Is it a unit of account? Those are the factors that will help us define the rules for taxation,” Tionko said.
The government intends to determine the size of the digital economy during the pandemic. The BIR issued a memorandum circular last week requiring social media influencers to register with the agency and pay the appropriate taxes.
Axie Infinity, on the other hand, bills itself as a pay-to-win game in which users compete in a turn-based challenge with the winner receiving a token that can be exchanged for cash.
Axie reported a trading volume of $173.99 million in June, bringing in $11 million in net income from over 350,000 daily users around the world, primarily in Brazil, Indonesia, and the Philippines.
Source: Philstar