Kazakhstan’s government is planning to raise the tax on cryptocurrency miners and will tie the new rate to the value of the minted cryptocurrency. The Nur-Sultan authorities believe that such an approach would benefit the state budget.
Kazakhstan is considering raising the tax on entities that mine cryptocurrency in the country. According to Minister of National Economy Alibek Kuantyrov’s statement, the tax will be calculated based on the market value of the mined cryptocurrency.
According to the report a government official stated that the implementation of such a scheme would increase budget receipts. Miners in Kazakhstan are currently paying a surcharge on the electricity they use.
Last summer, mining companies were required to pay more than other consumers. Tariffs were raised to 1 Kazakhstani tenge (approximately $0.0022) per kilowatt-hour of electrical power consumed by the energy-intensive industry.
Alibek Kuantyrov stated at a press conference this week:
“We are considering an increase in the tax burden for miners. At the moment, we are also considering linking the tax rate for miners to the value of the cryptocurrency. If crypto grows, it will be good for the budget.”
During a February government meeting, President Kassym-Jomart Tokayev directed officials to “multiply” the tax on cryptocurrency mining. The president also directed the country’s financial watchdog to identify all mining facilities in the country and examine their tax and customs documents.
Kazakhstan attracted bitcoin miners last year after China launched a nationwide offensive against the industry in May, thanks to its capped electricity rates. The influx of miners has been blamed for the country’s growing power deficit, and the Kazakh government has begun to tighten restrictions on the sector.
During the winter months, even authorised miners were affected by power outages. Electricity shortages have already forced some companies to leave the country and relocate to other mining locations, such as the United States. Over 100 coin-minting farms in Kazakhstan were closed down last month.
According to a recent report, authorities are going after crypto miners who take advantage of tax loopholes. Five mining companies have been accused of taking advantage of tax breaks available to IT companies and other companies involved in innovation development.
