The Philippine SEC and its ambition to collect taxes on Play2Earn gaming profits.
Hello everyone...
In the morning when I opened the news portal that I usually follow, I came across a statement that surprised me a lot and that only confirms the desperation that governments have to try to get money any way they can. This is something that is happening in the Philippines as a result of a large number of Filipino players in the most popular crypto game of the moment Axie Infinity.
As you know this crypto game has more than 600K Filipino players, who are looking for this type of income source because of the high poverty rate in that country, added to poverty we also have a high unemployment rate that was aggravated much more with the arrival of the pandemic, so many Filipinos saw the Play2Earn games as a means to obtain income equal or greater than a minimum wage without having to kiss the feet of an employer, this is thanks to the decentralized world.
Now, since there are more than 600K Filipinos who are earning a constant salary without any financial entity regulating them or knowing how much they earn, it bothers the government so much that it has now made a proposal that is about to become a law, where it is clarified that the profits or benefits obtained in the Axie infinity game must pay income tax since it is a benefit that is considered an asset. This plan seems to be being carried out by the Philippine Undersecretary of Finance, Antonette Tionko, in an attempt to take advantage of the huge wave of gamblers in the Philippines.
Because this proposal makes no sense at all.
One of the things, why this proposal is not yet approved, is that the central bank and the Philippine securities commission still need to determine whether Axies, SLP, AXS, are securities or currencies.
Because although the SLP can be traded for some profit, this was not the main purpose of the token, as it was created primarily to be used as an in-game currency, and the AXS token is simply an in-game governance token, and as I mentioned before, although it can be traded, it is not the main use of these tokens.
What will this mean for Crypto Games?
I don't want to be pessimistic, but the fact that this announcement has been made about one of the most popular crypto games in the crypto sphere only means bad news, because if we look at the case of Binance we will realize that the wave of regulations and restrictions to the colossus Binance started in the UK and after only days many countries among them the Philippines were denouncing Binance and putting restrictions to its activities because it was an exchange where hundreds of millions of dollars passed every day and the governments were not benefiting from that.
Now in the case of the benefits obtained in Axie infinity can equal the minimum wage, and if we multiply 266.13€ which is the current minimum wage in the Philippines (If I'm wrong please correct me someone Filipino) by the 600K active Filipino players that are in Axie infinity gives us a result of $187,786,916 that the government is not getting a single penny.
And since the Philippine Department of Finance has already made it clear that it wants a share of the profits generated by Axie and other play-to-earn games. There will be a lot of laws and regulations coming out for the companies creating these games and for the central ones in the country. And as the players of all crypto games are all over the world, you can now understand what news like this can do when it spreads like wildfire. So it is likely that in the next few weeks if this law is passed, we will see the SEC and the financial authorities of the countries also enact laws to collect taxes.
Conclusion
Seeing this is what governments are doing in a last desperate attempt to try to save something already dead, it is only more and more evidence that their end is near, so no matter how much of a mess they want to make it will not succeed.
The crypto players will continue to grow and the demand for these games will increase, and as it is a system independent of corrupt financial institutions, people will not care at all about the number of laws they want to impose and will look for ways to move forward.
Posted Using LeoFinance Beta
