The government of Kazakhstan is currently working on increasing the taxes on cryptocurrency mining, while expressing its intent to tie the new rate to the value of the minted cryptocurrency.
In a recently issued statement by the Minister of National Economy, Alibek Kuantyrov, implementing this mechanism will help increase the country’s budget receipts.
“We are considering increasing 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 the cryptocurrency grows, it will be good for the budget,” Kuantyrov said.
If the government moves ahead with this plan, it means miners in Kazakhstan would see their taxes grow in tandem with value of digital assets they are mining.
Kazakhstan became a crypto mining hub after China’s ban on the activity led to the migration of miners to friendly jurisdictions.
However, the Asian country’s attitude towards miners has drastically changed from what it used to be.
Last summer, mining enterprises were forced to pay more than most consumers, given the rising costs of energy usage within the country. Consequently, tariffs were increased to 10 Kazakhstani tenge (approximately $0.0022) per kilowatt-hour (kWh) of electrical power.
Additionally, several mining stations were forced to close down, because the government stopped supplying electricity to some of these facilities, saying that Bitcoin mining takes a toll on its energy grid, leading to widespread power blackouts.
Crypto stakeholders criticize the development
At no surprise, crypto stakeholders in the industry have criticized these policies and regulations.
Dennis Rusinovich, co-founder of Cryptocurrency Mining Group, stated that Kazakhstan has gone from “hero to zero,” despite the mining community “establishing a new sector in the country and building a strong global position as a bitcoin mining hub.”
Another mining stakeholder in the country, Alan Dorjiyev, states that there is no certainty on how the new taxes would be structured. Dorjiyev serves as the Director of Kazakhstan’s National Association of Blockchain and Data Center Industry.
Notably, the uncertainty surrounding mining taxation in the country generated from the country’s president, Kassym-Jomart Tokayev, who ordered the agencies to increase taxation on the space.
Tokayev also tasked the financial agencies within the country to check the customs and tax documents of all mining facilities in the country to ensure compliance with its tax regime.
All of this put together could force miners to migrate to other countries with more friendly policies and tax regime.
What do you think about this subject? Write to us and tell us!
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Did you like this post? Consider donating to us.