The celebrity accountant and tax expert briefly discussed the possibility of cryptocurrency and non-fungible tokens getting taxed in the Philippines.
Mon Abrea, one of the country’s leading tax experts and regarded as the Philippines’ ‘celebrity accountant’, shed light upon the nature of the taxation system in the Philippines, and the future of cryptocurrency in the country.
Abrea spoke to members of the press and blogging community, during the SHIfT HAPPENS: Grand Press Launch event, which saw the debut of both TaxWhizPH Mobile App 2.0 and the launch of IWAS BUWIS-it 2022 edition book, last June 01, 2022, at the ACG Tax Hub.
Asked what his position on taxes on cryptocurrencies is, Abrea responded with frustration on the nature of the taxation system in the country. “Unfortunately, Congress keeps talking about new taxes when they don’t really understand it” he shared.
According to Abrea, cryptocurrency is not yet defined in the Philippines. finance Undersecretary of the Philippines, Antonette C. Tionko, herself, admitted that the nature of cryptocurrencies in the country is yet to be fully defined.
“There is still no BSP regulation or ruling about cryptocurrency. But another unfortunate reality is that our tax rules are very broad, and encompassing” shared Abrea, who said that because the Philippine taxation rules do not clearly define or exempt sources from being taxed, any business that uses cryptocurrency can not avoid it.
“Unless there Is a law that exempts income from cryptocurrency, all of us should be ready that once there is a mechanism, and I am saying this, underscoring this, they can just talk about it but it can never be collected” Abrea added. He also took the 5% cosmetic tax that was passed under the TRAIN LAW, as an example, to show hard how taxing cryptocurrency-dependent economies can be, even after a law is passed.
“Nagparetoke na ng ilong, nagpadagdag na ng boobs, nagpalagay na ng abs, it has been three years, there is still no collection. They keep imposing taxes, but if thee is no mechanism, or budget, to collect it…good luck,” he teased.
The Bureau of Internal Revenue (BIR) does not provide specific economies subscribed to cryptocurrency and NFT (non-fungible token)-driven economies. According to cointext.com., the Securities Exchange Commission does not classify cryptocurrencies as securities or any similar asset type, thus only income taxes apply to cryptocurrencies. They can also be taxed when they are liquidated or sold against fiat.
Cryptocurrencies, then, can only be taxed when an income is realized between trades.