Cryptocurrency miners in Kazakhstan may face higher tax rates under a new bill signed by the country’s parliament.
Kazakhstan President Tokayev has signed a new piece of legislation amending the country’s law on taxes and other mandatory payments to the budget, as well as a supplemental law to improve the Tax Code’s execution. The changes establish separate tax rates for bitcoin mining.
The precise fees will be decided depending on the average cost of power used to produce coins during a given tax period. They begin at 1 Kazakhstani tenge (about. $0.002 at the time of writing) per kilowatt-hour (kWh) when a miner spent 25 tenge or more ($0.053) per kWh and may exceed 10 tenge if the power rate was in the 5 – 10 tenge ($0.011 – $0.021) range.
Electricity produced from renewable sources is taxed at a rate of 1 tenge per kWh, which is the lowest rate available to crypto farms. After a year of increasing power deficits in Central Asia, that fee was implemented on January 1, 2022. Cryptocurrency miners were accused of causing shortages after China’s May 2021 crackdown on the sector.
Kazakhstan and Crypto Mining
Kazakhstan has sought to curtail cryptocurrency mining by restricting energy supplies and shutting down coin minting operations throughout its regions during the frigid winter months. Some enterprises were obliged to shift to other mining areas or ship large amounts of equipment out of the country as a result of the actions.
All bitcoin miners working in Kazakhstan must be identified and taxed, according to a decree issued by President Tokayev earlier this year. State auditors went after mining companies in April for allegedly taking advantage of tax breaks they weren’t entitled to.
After announcing plans to raise taxes on miners earlier this year, the Nur-Sultan administration proposed tying the new rate to how much the generated bitcoin was worth. In official declarations, new tax restrictions are anticipated to equalize the demand on the power system and discourage the use of locally generated energy in mining.
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