Kazakhstan Authorities Propose 400% Increase In Tax On Crypto Miners ⋆ ZyCrypto

Kazakhstan’s Head of State Kassym-Jomart Tokayev has ordered an increase in taxes on electricity used by Bitcoin miners in the country, according to a local news outlet Kazinform.

Speaking during an expanded meeting of the government, the president stated that his government would embark on identifying all mining farms, checking their tax status, carefully studying any contracts entered into by those farms as well as evaluating other aspects of their activities. 

“I draw your attention once again: the state is not against white mining, but those who want to work in this area must have licenses, receive electricity at adequate tariffs, declare income and pay taxes, and launch green energy projects,” he said.

The president went further to say that they would adjust the electricity taxes for miners upwards, calling the current rate of 1 Tenge per kilowatt-hour ($0.0023) “negligible”.

“We will also raise mining taxes. The current rate – 1 tenge per kilowatt of power – is negligible. I instruct the Government to work out multiple increases in this tax, and in the shortest possible time,” he continued. 

In the few weeks, the Kazakh administration is expected to develop a fully-fledged package of solutions that will expedite the achievement of sound laws on digital mining and cryptocurrencies in the country, at the president’s orders.

In a previous meeting, First Vice Minister of Finance Marat Sultangaziyev had said that the government intends to raise the current tax rate to 5 tenges ($0.012) per kilowatt-hour, which is a 400% increase. He noted that the plan to introduce tighter regulations around crypto mining was to limit illegal power connections while bringing existing miners under the government’s purview.

Apart from an increase in electricity tax, Sultangaziyev also suggested the introduction of a tax on equipment for digital mining. The payment of tax on this equipment would be done quarterly and would be taxed the same way as for casinos.

“Even if it does not have electricity costs, but at the same time it has mining equipment installed, it will be taxed in the same way as for a casino, there is such a form when the casino pays for each card table, regardless of the activity,” the Vice Minister noted. 

Since last month, miners in the central Asian country have suffered power and internet outage, with the government shutting down electricity following a surge in fuel prices. Although local sources have told Zycrypto that the internet has since been restored, electricity outages continue to pose challenges to their mining activities.  

Following the recent steps by the government, crypto miners in Kazahstan could soon start feeling the heat, prompting them to relocate to friendlier jurisdictions such as Russia and the U.S.