Crypto Tax PH: No Clear Rules But Tax Code is All-Encompassing, Says Tax Expert
Sign up with your email and never miss another crypto and NFT story from the Philippines and beyond! Additional reporting from Michael Mislos Tax expert Mon Abrea said financial agencies and regulators must first implement a defined mechanism for cryptocurrency before proper taxes can be collected from it, noting that while there is no clear…
Additional reporting from Michael Mislos
Tax expert Mon Abrea said financial agencies and regulators must first implement a defined mechanism for cryptocurrency before proper taxes can be collected from it, noting that while there is no clear guideline, the Philippine tax code is all-encompassing, so it cannot be avoided. He explained this during the question and answer portion of the launch of his new book, IWAS BUWIS-it 2022 edition, together with the TaxWhizPH Mobile App 2.0.
When asked for his position on taxes regarding cryptocurrencies, Abrea noted how congress has kept on talking about new taxes when they don’t understand it. “Cryptocurrency is not yet defined in the Philippines. There is still no BSP (Bangko Sentral ng Pilipinas) regulation or ruling about cryptocurrency.”
Still, despite the lack of proper rules, Abrea emphasized the broad scope of the Philippine tax code.
“Another unfortunate reality is that our tax code is very broad and encompassing. Income from all sources including ill-gotten wealth, including undeclared income, but it was never taxed,” Abrea said, noting how, despite the presence of guidelines for cosmetic tax, nothing was collected from it. Abrea claimed.
Abrea did say Filipinos should prepare that at some point there will be crypto tax.
“(Tax on) cryptocurrency, we cannot avoid it, until there is a law that will exempt income from cryptocurrency. All of us should be ready once there is a mechanism, and I’m saying this, underscoring this with highlight, unless until there is a mechanism they can just talk about it but it can never be collected.” –Mon Abrea
“You (financial regulators) can keep on imposing taxes but if there is no mechanism, there is no budget to really collect it wala (nothing will happen),” he added.
Accordingly, after the proclamation to the upcoming administration, the Department of Finance (DOF) submitted a proposal for fiscal consolidation and resource mobilization program to the President-elect Ferdinand “Bongbong” Marcos Jr. and his economic team. The proposal states a recommendation to raise and introduce new taxes, which include taxation on cryptocurrency by 2024, to pay off the P3.2 trillion debts incurred during the Covid-19 pandemic. (Read more: Dept. of Finance Proposes Crypto Tax by 2024 in the Philippines)
The proposal, however, received a disagreement with the outgoing BSP Governor Benjamin E. Diokno, the incoming chief of the DOF, instead stated that the finance department must focus mainly on the government’s tax administration during the first year of the new administration.(Read more: Incoming DOF Chief Disagrees on Proposed Tax Reforms Which Include Crypto, Digital Goods)
To date, there are no clear taxation rules regarding cryptocurrency in the Philippines, it is treated as taxable when sold with gain (capital gains tax). (Read More: Taxation of Crypto in the Philippines)
Moreover, the Bureau of Internal Revenue (BIR) are just encouraging cryptocurrency investors, including play-to-earn users like Axie Infinity players, to register with the bureau as an income earner and pay taxes or risk penalty and jail time. (Read more: Cryptocurrency Tax Philippines | Play-to-Earn Tax 101 by PDAX and Taxumo)
This article is published on BitPinas: Crypto Tax PH: No Clear Rules But Tax Code is All-Encompassing, Says Tax Expert
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