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Saturday, February 4, 2023

Kazakhstan to Increase Tax for Miners, Considers Tying Levy to Crypto Prices

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Kazakhstan to Increase Tax for Miners, Considers Tying Levy to Crypto Prices – Kazakhstan’s government is preparing to raise the tax burden on cryptocurrency miners, with the new rate tied to the value of the created cryptocurrency. The authorities in Nur-Sultan feel that taking this approach will benefit the state budget.

The plan, according to Alibek Kuantyrov, Minister of National Economy, is to determine the tax based on the market worth of the mined cryptocurrency.

According to Tengrinews.kz, a government official stated that implementing such a plan will improve budget receipts. In Kazakhstan, miners are currently charged a fee on power usage.

Also Read: Bitcoin Mining Startup Primeblock to Go Public via SPAC Merger as SEC Targets SPAC Deals

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Last summer, mining companies were required to pay a higher price than ordinary consumers. Tariffs were raised by 1 Kazakhstani tenge (about $0.0022) per kilowatt-hour of electrical power consumed by energy-intensive industries. 

Kuantyrov said during a press conference this week:

“We’re thinking about raising the tax burden on miners. At the time, we’re thinking about tying the tax rate for miners to the cryptocurrency’s value. Cryptocurrency’s growth will be beneficial to the budget.”

President Kassym-Jomart Tokayev tasked officials to “multiply” the tax levy on crypto mining during a government meeting in February. The country’s financial watchdog was also directed to identify all mining operations in the country and review their tax and customs documentation.

When China launched a statewide offensive against bitcoin mining in May, Kazakhstan became a magnet for bitcoin miners due to its restricted electricity tariffs. The country’s growing electricity deficit has been blamed on the inflow of miners, and the Kazakh government has begun to crack down on the industry.

Also Read: Bitcoin Miners Catch a Break as Mining Difficulty Drops for the First Time in 3 Months

Kazakhstan to Increase Tax for Miners – During the winter months, permitted miners were affected by power outages. Some enterprises have already been forced to leave the country due to electricity constraints and relocate to other mining sites such as the United States. Over 100 coin-mining operations in Kazakhstan were shut down last month.

Authorities are pursuing crypto miners who take advantage of tax loopholes, according to a recent report. Five mining corporations have been accused of abusing tax breaks available to IT firms and other businesses active in innovation development.

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