The Kazakhstan government is proposing a three-pronged plan that would make crypto miners pay significantly more to operate in the country.
On February 4, Kazakhstan’s First Vice Minister of Finance, Marat Sultangaziyev, proposed a pricing hike for crypto miners from $0.0023 per kwh to $0.01 (a 335 percent increase). He also proposed a tax on each individual graphics card (GPU) and piece of crypto mining equipment. He compared the “tax-per-video card” to “how casinos get taxed” for each table they run, regardless of whether the table is operating or not.
The third part of his proposal was to remove mining equipment from the exemption from value-added tax (VAT). Mining Bitcoin needs the use of specialised hardware to perform the mathematical computations required to add new blocks to the network. Up to 10,000 mining rigs, comprising ASICs (application-specific integrated circuits), GPUs, racks, cooling units, and other equipment, are housed in larger mining operations.
BIT Mining is a major Bitcoin mining firm that relocated from China to Kazakhstan.
The low cost of power and proximity to China have attracted miners from Chinese authorities during the country’s crackdowns. As a result, Kazakhstan has surpassed the United States as the second-largest generator of Bitcoin hash power, accounting for around 18% of the network’s hash rate as of August 2021, according to Cambridge University. If the crippling tax measures become law, it may make it less desirable for new and current miners to call it their base of operations.
