Amid the enormous success of crypto-powered game Axie Infinity in the Philippines, the local Department of Finance has made clear that it wants a cut of profits generated past playing Axie and other play-to-earn games.

An Baronial 23 study from Inquirer cites Philippine Finance Undersecretary Antonette Tionko every bit clarifying that any profits gleaned through play-to-earn games are subject to income tax.

"Cryptocurrency is an asset, so it'due south already taxable in the Philippines [...] whoever earns currency from it, information technology'due south income you should study it," she said.

While the official asserted that that play-to-earn gains "are subject to income tax," Tionko conceded that lawmakers are yet to allocate whether Axie's in-game NFTs or native tokens Smooth Dear Potion (SLP) and Axie Infinity Shards (AXS) are accounted to be securities or currencies.

She added that the matter should be determined by the local primal bank and Securities and Exchange Committee:

"Is it a security? Is it a currency? So those are the things that volition help us define the rules on how information technology should be taxed. Merely regardless of how information technology is characterized, information technology's taxable — subject to income revenue enhancement."

While both the SLP and AXS tokens are earned through playing Axie Infinity, SLP functions as an in-game currency while AXS is the governance token of the Axie community.

Play-to-earn gaming exploded in popularity across the Philippines amid the pandemic, with the surging cost of crypto assets meaning that locals could generate a decent income comparable to local wages by playing Axie Infinity.

Tionko as well highlighted that Sky Mavis, the Vietnamese game studio that developed Axie Infinity, is not registered with the Philippine Bureau of Revenue despite generating income from sources based within the Philippines.

"That is ane of the things that nosotros hopefully capture once we take that arrangement of registration for non-residents, those types of companies not in the Philippines."

The news sparked selling in the SLP markets, with the token crashing past as much as 15% on Aug. 24 before closing the day at a most 7% draw-down.

Related: Axie Infinity actor buys ii houses in the Philippines from in-game profits

SLP has produced a rollercoaster performance over contempo months, suddenly rocketing past more than 900% from $0.035 on April 26 to top out at a record high of above $0.36 on May ii, according to CoinGecko.

Since then, SLP has violently oscillated between roughly $0.13 and $0.35, with the markets currently downward lx% from July'southward local top.

SLP/USD: CoinGecko