Kazakhstan President Signs Law To Increase Crypto Mining Tax
Regulation News
- The president of Kazakhstan has signed a law increasing the tax on crypto mining.
- The tax will be calculated based on the quantity and cost of electricity used in the mining of digital currencies like bitcoin.
- According to authorities, the new tax charges will reduce energy grid strain while also raising revenue.
The president of Kazakhstan, Nursultan Nazarbayev, has signed a new piece of legislation that amends the country’s Tax Code and adds several provisions to its implementation.
The revisions establish varying tax rates for cryptocurrency mining. According to reports, the Kazakhstan president has signed a bill imposing heavier taxes on bitcoin miners in the country following a power shortage and theft occurrences over the previous few months.
The new tax law will bring about significant changes to the Kazakh tax code. The amount owed to the government as taxes will be determined by the quantity of electricity used to mine crypto during a given tax period. The amount can range from 1 Kazakhstani tenge to 10 Kazakhstani tenges (about $0.0021 to $0.021 in the current USD exchange rate).
However, crypto miners who utilize renewable energy sources will be charged the least amount of tax, which is 1 tenge per kWh, regardless of the costs involved.
After China imposed a blanket ban on crypto mining in 2021, Kazakhstan became a preferred destination for bitcoin miners. Since then, the crypto mining scenario in the country has deteriorated because of a lack of power and an enormous number of mining operators.
Kazakhstan attempted to limit bitcoin mining, imposing limitations on electrical energy supply during the cold winter and shutting down coin-minting utilities in its territories. Some businesses were forced to relocate or move a large portion of their equipment to another country as a result of the regulations. The extreme market conditions have pushed many miners to the brink of bankruptcy.
The new tax rates could be the final straw that breaks the camel’s back. Compass Mining, a Bitcoin mining company, has recently laid off 15% of its workers because of extreme market conditions. The company stated that the layoffs were due to “implement significant compensation and spend reductions” across the rest of the business.
