Norway Prepares to Reverse Electricity Tax Cut for Cryptocurrency Miners – Norwegian authorities are on their way to repeal a tax cut that has benefited crypto mining companies for years. They want to get rid of the lower electricity tax rate for Nordic data centers, many of which are minting digital currencies.
According to a government announcement published this week, power for data centers will thus be subject to the general electricity tax rate, which also applies to other service industries. Finance Minister Trygve Slagsvold Vedum explained why the move was made: “We are in a completely different situation in the power market now compared to when the reduced rate for data centers was introduced in 2016.”
People Also Read: UK Offers New North Sea Oil And Gas Licences Despite Climate Concern
Vedum elaborated that power supply is now under pressure in many areas, which causes prices to rise. At the same time, the crypto extraction sector has expanded in Norway. “We need this power for the community. The government will therefore discontinue the scheme,” the member of the cabinet in Oslo was quoted as stating.
According to the government, investigations have revealed that it is nearly impossible to distinguish between electrical energy used for digital coin minting and that consumed by data centers for other purposes.
Officials believe that if crypto mining is to be subject to the regular electricity tax rate, the tax break for data centers must be phased out entirely. In this case, they estimate that budget receipts will rise by 150 million Norwegian kroner (more than $14 million) this year and another 110 million kroner (more than $10 million) next year.
People Also Read: Crypto Exchange Okx Blocked by Russia’s Telecom Watchdog
The latest development follows a failed attempt in May of this year to prohibit the energy-intensive mining of proof-of-work cryptocurrencies. The far-left Red Party’s push in parliament in that direction was rejected by the majority of Norwegian lawmakers. They also rejected a proposed increase in electricity taxes for cryptocurrency miners at the time.
