The Philippine government has undertaken to adopt an international reporting framework for digital exchange assets in 2028, in line with global efforts to limit cross -border tax evasion and illegal financial flows. The move emphasizes the country’s Ministry of Finance (DOF) to strengthen financial openness when digital currencies become more mainstream in the country.
“We need faster and stronger systems for collaboration if we are to beat tax evasion and illegal transactions,” Ralph recto, financial secretary, mentioned in a statement. “The government must ensure that Crypto access users pay their fair share of taxes and that no illegal financial activity is punished.”
Join 67 jurisdictions in Global Tax Transparency Initiative
During the 8th Asia initiative meeting held in Mald, the Maldives, Finance Secretary Charlito Martin Mendoza formalized the country’s commitment to adopt Crypto-Asset Reporting Framework (CARF), developed by the organization for financial cooperation and development (OECD).
CARF is designed to standardize automatic exchange of tax Information about crypto assets over jurisdictions. The framework ensures that individuals and units engage in cross -border digital asset transactions cannot hide income or profits from the tax authorities.
The Philippines joins 67 jurisdictions, 10 of which are in Asia, which has promised to implement Carf with either 2027 or 2028. The timing of the country’s engagement is in line with the end of President Ferdinand Marcos Jr.The six -year period, during which tax discipline and openness have recurring themes.
“This is a rapid commitment as digital currency becomes one of the preferred funds for transactions,” Recto noted.
Digital currency growth and risks in the Philippines
Recto previously stated that Philippines has invested an estimated PHP6 trillion ($ 107 billion) in digital currencies, more than twice as much as the combined size of the country’s business process outsourcing and offshore Game sectors.
“In the Philippines, many Philippines have already invested in crypto. Something like 6 trillion Peso’s worthy investments in crypto is made,” recto told Bloomberg in an interview earlier this year. He attributed this growth to a technically knowledgeable, youthful population and the widespread use of Digital walletsAnd note that 90 million Philippines now use such tools to save, invest and shop.
But third -party data data paints a more measured image. Blockchain Analytics Chain analysis Estimated Philippines in 2024 Crypto flows at $ 43.1 billion, from $ 66 billion in 2023. The company attributed to the obvious decline of 40% to revised methods of tracking Decentralized funding (Defi) activity.
In spite of the deviation, the figures underline the importance of the tax authorities holding in line with The rapid assumption of digital currencies. The decentralized and boundless nature of digital assets poses challenges for enforcement and taxation.
Increasing information exchange before carf -chilling
DOF also reported parallel efforts to improve the tax opening and compliance mechanisms. At the ASIA initiative meeting, the department shared the country’s progress in adopting the Convention on Mutual Administrative Support on Tax Matters (MAAC), a multilateral tax assessment tool and fundraising cooperation.
It also described the measures taken to prepare for the improved monitoring process, strengthening the exchange of information (EOI) on request and the adoption of the joint reporting standards (CRS).
The ASIA Initiative aims to improve international cooperation on Tax opening unit and fight illegal financial flows. The Philippines joined in 2023 and have since worked to adapt to globally agreed standards.
The meeting also marked the launch of the 2025 taxpayer in the ASIA report, which describes regional progress made in the application of the tax framework during 2024.
Globally, efforts in the tax transparency have been shown to be effective. From 2009 to 2024, at least $ 24 billion ($ 27 billion) has been identified in additional revenues through EOI, Offshore investigations, AEOI (automatic exchange of information on financial account) and related disclosure programs. Only in 2024, EUR 1.9 billion ($ 2 billion) was identified in undeclared income on these funds.
Raise revenue without tax increases
The CARF commitment comes when the Marcos administration repeats its intention not to impose new taxes. Instead it aims to Increase state revenue through improved collection and enforcement.
This policy direction has already made results, according to the authority. In April 2024, the revenue collection reached $ 522.1 billion PHP ($ 9 billion), giving a total of the first four months to 1.5 trillion PHP ($ 26 billion). Of this, 94% came from taxes due to an increase in tax revenue 11.49%.
DOF says that the digital currency framework complements these efforts by connecting gaps in areas where tax evidence risks are highest.
Watch: The Philippines Go against Blockchain-enabled technology
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