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Sunday, June 4, 2023

Crypto Miners in Kazakhstan Start Paying Higher Electricity Fees

Crypto Miners in Kazakhstan Start Paying Higher Electricity Fees – Beginning on January 1, the electricity fee imposed on cryptocurrency miners in Kazakhstan is calculated on a progressive basis. The initial universal surcharge of 1 Kazakhstani tenge ($0.002) per kilowatt-hour (kWh), first adopted in the summer of 2021, can now reach 25 tenge (over $0.05). The rate in each case depends on the source and price of electrical energy used to extract digital currencies. 

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In July 2022, President Kassym-Jomart Tokayev signed a measure amending the country’s Tax Code that included the new mechanism for determining tariffs. The tax is based on the average price of power consumed by a miner throughout the tax period. The minimal price would be 1 tenge if a company paid 24 tenge or more per kWh, according to the most recent tariff scale cited by Interfax Kazakhstan and other local media. The lowest rate will also be offered to crypto farms that use renewable energy, regardless of the electricity cost.

And for energy produced from other sources, the heavier the tax load, the cheaper the power utilized. The charge can reach up to 25 tenge per kWh, according to reports. After China’s crackdown on the industry in 2021, Kazakhstan became a mining hub, enticing crypto miners with its low, subsidized electricity costs. The increase in the country’s electricity shortage is attributed to the entry of mining companies. The Nur-Sultan government has been pursuing illegal mining farms and taking moves to more fully control the industry.

A provision in a new bill passed by the Kazakh parliament in December seeks to compel miners to purchase excess electricity on a government-controlled market. A previous legislative proposal, introduced in October by a group of legislators, restricts mining to registered companies exclusively. It also permits non-resident firms to mine within the country if they have arrangements with locally licensed data centers.


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