Potential Taxation Coming on Play-To-Earn
The Punters Pick #16 — Play-to-earn gaming gains greater legitimacy as Philippines government seeks to tax players
Blockchain-based gaming has gained a new level of legitimacy as the Philippines government seeks to tax some play-to-earn players in the country. Play-to-earn crypto game Axie Infinity took off in the Philippines and the country is reported to account for roughly half of the game’s 1 million player user base.
The country’s government is considering taxing the players and the publishers of the game alike. This is proof of the growing awareness of the game and the level of adoption that it has seen in the country.
Similar to a relief program, Axie Infinity stepped in as a rescue package for a population of Filipinos and citizens of other nations across the world when the realities of the Covid-19 lockdown hit home. Several citizens who had lost their regular sources of income embraced the play-to-earn gaming platform and it turned out to be a viable source of income for growing amounts of the Philippines population.
In the latest version of The Punters Pick, we highlight the actions of the government of the Philippines as plans to introduce a tax regime on players and the publishers of Axie Infinity get underway. We also consider the potential impact of this move on the growing play-to-earn ecosystem. Before we dive into the proposed tax, we first review our weekly development roundup.
CrypotPunt Development Roundup
We are excited to announce that CryptoPunt PUN tokens will be lined up for their first exchange listing by the end of September. This will be an important event for all CryptoPunt stakeholders and we are excited to share that the platform has been making phenomenal progress as we approach this event.
🎲 Games progress
- The CoinFlip game will be ready for launch alongside the PUN token listing at the end of September. Over the next week, we will be finalizing the code related to the fees and rewards for the CoinFlip game.
- Over the past week, we have added in a buy-in feature into the Blackjack game while also carrying out a test on the game functionality
- We have implemented further multiplayer functionality into some of the gaming-related smart contracts
⛏️ Broader improvements
- The CrypoPunt notifications page has been fully finalized
- We have carried out research on how to further secure the CryptoPunt platform and make it more resilient against various attacks such as DDOSs
- Completed some automations related to our Polygon MATIC and Chainlink integrations
In roughly one month, the PUN token will be listed on a market and it will be accessible to the wider cryptocurrency market. All token holders to date are among the earliest advocates of our upcoming platform.
We can’t wait to make our sublime gaming experience accessible to the broader population of cryptocurrency users!
Axie Infinity and the Philippines
Axie Infinity is a blockchain-based online game where gamers engage in battles using the platform’s NFTs. Within the game’s ecosystem, gamers can earn more NFTs through battles and breeding. The gamers can also sell them to other participants within the Axie Infinity marketplace. Gamers in developing countries have embraced this game as it has proven to be a source of income for many.
The relationship between the Play-to-Earn blockchain game, Axie Infinity, and the Philippines population continues to throw up new and interesting dynamics as the days roll by. Having been established as the “geographical home” of the game, the nation’s government is planning to develop a tax system for the game’s ecosystem.
The introduction of a play-to-earn tax regime
In a recent report, the Philippines Undersecretary of Finance Antonette C. Tionko made known to the public that there is an ongoing discussion by the country’s Securities & Exchange Commission (SEC) and central bank to properly qualify Axie tokens (AXS), to determine whether they can be described as assets or securities.
The essence of this discussion and proper qualification of Axie tokens is to determine an appropriate tax regime on revenue made by players. Also, on the part of the game’s publishers, Sky Mavis, the undersecretary noted that since they are not based in the Philippines, they will be obligated to pay taxes for every revenue made from local sources.
A sign of increased awareness and adoption
This move by the government of the Philippines, though controversial, is a significant leap in terms of play-to-earn becoming mainstream. Bitcoin and Ethereum underwent similar developments with regulators seeking to tax the asset before it was adopted by mainstream enterprises.
A similar phenomenon could unfold in the play-to-earn industry. Once governments determine how to properly qualify and tax the asset, more businesses can be built around the growing play-to-earn movement and institutions will also become more comfortable gaining exposure to the industry.
About CryptoPunt
CryptoPunt is a next-generation gaming and gambling Dapp. Underpinned by the Ethereum blockchain, CryptoPunt is positioning itself to be the leading blockchain-based gaming application. Users can start gaming in less than one minute with no KYC or registration process. CryptoPunt will offer a broad suite of games, including an option that has a virtual world and an in-game economy.
