Kazakhstan To Impose Higher Tax Rates On Crypto Miners
- The President of Kazakhstan has signed a bill to impose higher tax rates on crypto miners.
- The tax will depend on the amount of electricity used to mine and the average electricity price.
As per reports from local media outlets, the President of Kazakhstan has approved a bill with his signature to impose higher taxes on cryptocurrency miners in the nation due to the deficit in electricity and theft cases that it has seen in the past few months.
The President signed the Law of the Republic of Kazakhstan on Amendments and Additions to the Code of the Republic of Kazakhstan “on Taxes and Other Mandatory Payments to the Budget” (Tax Code) and the Law of the Republic of Kazakhstan on Enactment of the Code of the Republic of Kazakhstan “on Taxes and Other Mandatory Payments in budget.”
The tax will be levied on the basis of the average price of the electricity consumed to produce coins during a certain tax period. These prices start for as low as 1 Kazakhstani tenge (approx. $0.002 at the time of writing) per kilowatt-hour (kWh) when a crypto miner paid 25 tenge or more ($0.053) and if the tariff was in the range of 5 – 10 tenge ($0.011 – $0.021), it can reach 10 tenge.
Interestingly, those crypto farms in Kazakhstan which use the least energy and use renewable sources of energy to mine cryptocurrencies will have to pay the least taxes, i.e., as low as 1 tenge per kWh. The nation introduced a surcharge for crypto miners after it started to face shortage of electricity and had to borrow from neighbouring nations.
Kazakhstan was a go-to destination for crypto miners after the 2021 crypto mining crackdown intiated by China. Since then, the crypto mining scenario in the nation has worsened owing to the shortage of electricity and a huge influx of mining operators.
The government recently closed down 100 crypto mining operation centers in Kazakhstan owing to the shortage of electricity and suspended activities, dismantled and removed their equipment from a number of locations. The tax officials and state auditors went after the crypto mining firms and found several tax benefits that these miners were enjoying that they weren’t supposed to.