In taxation, income is the increase in wealth. If someone's wealth increases then that person derives an income, unless the contrary is proved. And if someone derives income then he must give the share of the government, unless the law exempts. But what if the income being earned is a cryptocurrency converted into Philippine peso? Will it be taxed? Many argued that earnings from coins trading and steeming is tax free. They believe that there is no law regarding crytpocurrencies as of the moment. Moreover, there is no provision in the NIRC (tax code) regarding cryptos. It is as if the heavens are on their side. But let us look back again to the definition of resident citizen in the Tax Code. All income from and outside the Philippines are taxable. This is the general rule.

Trading in Philippine Stocks Exchange is subject to Stock transaction tax, a final tax, but how about Trading in Bittrex or other coins exchange platform? What tax can the Philippine Government claim? Another is salary and business income of an individual is subject to a regular income tax. Again, how about income from steeming?

Tax exemptions are construed strictly against the taxpayer and liberally in favor of the taxing authority while tax laws are construed against the government and liberally in favor to the taxpayer. When it come to crypto income, surely there is no provision about it in the NIRC. But the one must prove that such income is also exempted (strictissimi juris).

As of now, there is no wide range crypto coins exchange platform in the Philippines. Coins.ph only offers BTC. Coins are traded in foreign exchanges making it hard for the PH government to extract final taxes like transaction taxes. Moreover, capital gains tax cannot be applied to it. So, if does not fall between the two then crypto income falls to the regular income tax.

Income within and without the Philippines are taxable as a resident citizen. And with regards to the coins that Filipino Resident Citizens earned must be taxed in accordance with the law. But the problem arises as taxes in the Philippines are self-assessing. People file and declare the amount of wealth they had and cryptos are assets so hard to trace. According to IRS (Internal Revenue Service of the US) Bitcoins and Altcoins are subjects of federal income.¹ If the US declared it as a subject of federal taxes that is being strictly regulated to extract exact taxes sooner maybe the Philippines may declare it if there is such necessity. With the growing number of users of cryptocurrenices in the Philippines, one day cryptos will be regulated by government authorities to extract the proper taxes. Moreover the growing number of crypto users alarmed the Banko Sentral ng Pilipinas (Central Bank of the Pihilippines) that they planned to strictly regulate it as this new digital currencies can be an instrument of money laundering.