Kazakhstan President Signs Law Increasing Tax Burden for Crypto Miners

Must read

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH Richard Adrian · 20 mins ago · ...

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil Liam 'Akiba' Wright · 5 hours ago · 2...

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom Christian Nwobodo · 3 hours ago ·...

Upbit’s parent company Dunamu sees profit drop 76% in Q3

Upbit’s parent company Dunamu sees profit drop 76% in Q3 Soumen Datta · 6 hours ago · 1 min read...

Kazakhstan President Signs Law Increasing Tax Burden for Crypto Miners

President of Kazakhstan Kassym-Jomart Tokayev has signed into law a bill amending the country’s Tax Code to impose higher tax rates on crypto miners. The levy will depend on the amount and average price of electricity utilized in the extraction of digital currencies like bitcoin.

Cryptocurrency Miners in Kazakhstan to Pay Higher Taxes

President Tokayev of Kazakhstan has signed a new piece of legislation introducing changes to the nation’s law “On Taxes and Other Mandatory Payments to the Budget” and supplementary law enhancing the implementation of the Tax Code. The amendments introduce differentiated tax rates for cryptocurrency mining.

The exact levies will be determined based on the average price of the electricity consumed to mint coins during a certain tax period. They start as low as 1 Kazakhstani tenge (approx. $0.002 at the time of writing) per kilowatt-hour (kWh), when a miner paid 25 tenge or more ($0.053) per kWh, and can reach 10 tenge, if the electricity tariff was in the range of 5 – 10 tenge ($0.011 – $0.021).

Crypto farms using electrical energy generated from renewable sources will pay the lowest tax rate at 1 tenge per kWh, regardless of its cost. That surcharge was enforced on Jan. 1, 2022, after the Central Asian country saw a growing power deficit throughout last year. The shortages were blamed on the influx of crypto miners that followed China’s decision to crack down on the industry in May 2021.

New Tax Rates to Reduce Load on Nation’s Power Grid, Government Says

Kazakhstan tried to limit cryptocurrency mining, too, imposing restrictions on electricity supply during the cold winter months and shutting down coin minting facilities across its regions. The measures forced some companies to relocate to other mining hotspots or move a significant portion of their equipment out of the country.

In February, President Tokayev ordered relevant authorities to identify all cryptocurrency miners operating in Kazakhstan and raise their taxes. In April, state auditors went after mining businesses that allegedly exploited tax benefits they were not supposed to benefit from.

That month, the government in Nur-Sultan announced it’s preparing to increase the tax burden for miners and one of the initial proposals was to tie the new rate to the value of the minted cryptocurrency. According to official statements, the new tax rules are expected to level the load on the power grid and discourage the consumption of domestically produced electricity for mining.

Do you expect more crypto miners to leave Kazakhstan after the tax raise? Share your thoughts in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More articles

Latest article

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH Richard Adrian · 20 mins ago · ...

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil Liam 'Akiba' Wright · 5 hours ago · 2...

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom Christian Nwobodo · 3 hours ago ·...

Upbit’s parent company Dunamu sees profit drop 76% in Q3

Upbit’s parent company Dunamu sees profit drop 76% in Q3 Soumen Datta · 6 hours ago · 1 min read...

Research: Whales have been offloading Bitcoin since 2021

Research: Whales have been offloading Bitcoin since 2021 Zeynep Geylan · 6 hours ago · 2 min read ...