AXS falls over 7% as the Philippines says it would tax Axie Infinity and its players

Key Takeaways

• The Philippines will tax earning of players from gaming platfrom Axie Infinity
• Axie Infinity is registered in Vitenam, but that doesn’t stop financial authorities from targetting it
• The news cause AXS and SLP prices to dip.

YEREVAN (CoinChapter.com) — On the backdrop of the rising popularity of online multiplayer video games that allow players to earn in cryptocurrencies, like the Axie Infinity, the Philipines has decided to tax players.

According to Finance Undersecretary Antonette C. Tiono, the country will levy taxes on earnings from these gaming platforms.

Axie Infinity trades under the ticker AXS. As the news spread, AXS fell over 7% on the charts.

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Financial Regulators go after Axie

The Philipines Department of Finance (DOP) and the Bureau of Internal Revenue (BIR) have singled out Axie Infinity as prime industry representatives. 

Axie Infinity is an online adventure game developed by Sky Mavis, a Vietnamese gaming studio.

The blockchain-based game became popular in the Philippines, especially during the pandemic. The format of the game is such that it allows players to earn cryptocurrencies. They can then exchange and trade these cryptocurrencies for Philippine pesos.

The players earn crypto by purchasing three “Axies” or digital pets on the gaming platform, which they must breed and hatch offspring to increase their number. Players then deploy these characters to go and fight on the battlefield in the game. The platform rewards those players that complete these battles in the form of cryptocurrencies.

Although the developer of the game, Sky Mavis, is a non-resident foreign corporation and is based out of Vietnam, the Philipines still want to tax any income earned in the country. Sky Mavis is also not registered with the Bureau of Internal Revenue (BIR).

“It is not registered in the Philippines. That is one of the things that we hopefully capture once we have that system of registration for non-residents. It’s not in the Philippines, but certainly, whoever earns currency from it, you should report it,” 

Tionko said.

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Unclear characterisation of Axie

Although the country is all set to tax players who earn through the Axie platform, the status of AXS remains undecided.

The Securities Exchange Commission (SEC) of the Philipines and the country’s Central Bank (Bangko Sentral ng Pilipinas) have still not determined whether Axie is a currency or a security.

“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.”

said Tionko, the head of DOF’s Revenue Operations Group.

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SLP prices dip 

As the country prepares to tax players, the price of SLP, the inhouse token of the Axie gaming network, has taken a hit.

Gamers started selling off their SLP, causing the token to crash by as much as 15%. When the markets closed, it was down over 7%.

A few months ago, SLP had caught investors’ and perhaps the authorities’ attention when it put a stellar performance by increasing over 900%. It had gone from $0.035 on April 26 to an impressive high of above $0.36 on May 2.

As time passes, we can expect more clarity coming from the Philipines on the future of SLP and Axie Infinity.