Kazakhstan Auditors Go After Crypto Miners Accused of Exploiting Tax Benefits

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Kazakhstan Auditors Go After Crypto Miners Accused of Exploiting Tax Benefits – Authorities in Kazakhstan discovered many enterprises minting digital currencies that were reportedly taking advantage of tax breaks they weren’t permitted to get. The crypto firms registered as innovative enterprises, according to auditors, in order to get millions of dollars in tax preference.

Kazakhstani auditors discovered crypto mining companies that were able to take advantage of tax benefits generally reserved for businesses engaged in technological development.

According to a member of the country’s Accounts Committee, which controls budget spending, this indicates that the “Digital Kazakhstan” program is not being adequately executed.

Also Read: Study Claims China Mining Ban Worsened Bitcoin’s Carbon Footprint

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According to the Inbusiness.kz portal, Akylbay Ibraev revealed that the companies became residents of the Astana Hub and received support for their investment projects in the field of cryptocurrency mining, despite the fact that cryptocurrency mining is not the tech park’s primary goal.

In the third quarter of 2021, Ibraev revealed that five mining farms received tax breaks worth 8.5 billion tenge ($18 million). ” They should not be entitled to the tax exemptions”, according to the official. “The hub’s job is to attract and implement IT technology investment initiatives,” he explained.

However, it turns out that the miners have not broken any laws. The Accounts Committee is currently proposing changes to avoid future instances like these. “Based on the results of our audit, a request was made to the government to alter the legislation in this area,” Ibraev added.

Furthermore, Askar Zhambakin, Kazakhstan’s Deputy Minister of Digital Development, Innovation, and Aerospace Industry, claims that crypto firms are not to blame for any state budget damages or losses.

“Other entities and IT enterprises, as well as mining farms, have the right to register at the tech park.” To solve this issue, we are now modifying the registration rules,” the government official added.

Kazakhstan, which became a mining hotspot last year when China launched an offensive against the industry, has also cracked down on the business in recent weeks.

President Kassym-Jomart Tokayev ordered the country’s financial watchdog to identify all mining businesses and inspect their tax and customs documentation in February, blaming them for the country’s rising power deficit.

Also Read: Crypto Mining In Thailand Is Booming After Chinese Ban

During the winter months, power outages have harmed mining operations, and electricity shortages have already driven several corporations to relocate to other nations, such as the United States. Authorities in Kazakhstan shut down over 100 currency minting facilities, including lawfully operational bitcoin farms, in mid-March.

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