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Kazakhstan Makes $1.5 Million From Crypto Mining Sector in Q1

Kazakhstan Makes $1.5 Million From Crypto Mining Sector in Q1 – The government of Kazakhstan announced this week that Kazakhstan has received 652 million tenge (almost $1.5 million) from the crypto mining industry in the first three months of the year. The money was raised by levying a surcharge on the power used by legally functioning mining farms around the country.

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The cost, which went into effect on January 1, 2022, is based on 1 tenge every kilowatt-hour of electrical energy spent for cryptocurrency extraction. Mining companies must pay it by the 20th of the month after the respective quarter.

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Kazakhstan’s tax code does not yet include the surcharge. The required amendments were recently adopted on first reading in the Mazhilis, the lower house of parliament, and the authorities now plan to introduce varied charges based on the cost of the power used.

On the one hand, the change is projected to boost budget receipts, while on the other, it is expected to reduce electricity usage for the energy-intensive manufacture of digital currencies. Following China’s crackdown on the mining industry in May of last year, the Central Asian country became a significant mining hotspot.

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The surge of miners has been blamed for the country’s rising power deficit, which has forced dozens of mining farms to shut down temporarily. Some companies have already left the country due to electricity problems.

President Kassym-Jomart Tokayev instructed officials to “multiply” the tax levy on crypto mining during a government meeting in February. He also instructed the country’s finance watchdog to identify all mining farms.

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Kazakhstan tightened its registration laws and reporting requirements for miners in early May, requiring companies to disclose a wide range of information, including the energy requirements of their mining equipment, planned investments, as well as personnel number. Meanwhile, government auditors have been working to fix tax loopholes that some miners have taken advantage of.

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