New Taxes Await for Kazakhstan’s Beleaguered Bitcoin and Crypto Miners
The government of Kazakhstan has unveiled a package of measures aimed at further taxing the nation’s Bitcoin (BTC) and crypto mining sector. The measures will involve tax hikes on electricity, a crackdown on unregistered miners, a tax on mining hardware, and the introduction of VAT charges on mining-related equipment sales.
The tone was set last week by the Minister of Digital Development Bagdat Musin, who took to Facebook to complain that unregistered crypto miners were “severely damaging” the national “energy system.” He added that the “energy costs of illegal mining” were currently on course to “surpass 1 gigawatt.”
He concluded by calling on all miners not already registered with the department to make their presence known and join a national database of approved miners.
Miners have had a rough winter so far in Kazakhstan, one of the world’s biggest mining destinations. They were partly blamed for energy shortages and fuel price rises that led to bloody social unrest and their data centers were left stranded without power for months on end. Most recently, their power lines were cut once again with emergency imbalances disrupting the grid.
Now, in a country that once courted them openly, they are facing a range of new financial barriers that could lead some to consider relocation options.
According to Kazinform, the government has unveiled a draft bill named ‘On Digital Assets in the Republic of Kazakhstan’. In the bill, Marat Sultangaziev, the Finance Ministry’s Deputy Minister stated at an interdepartmental commission, were provisions including a monthly inventory check on miners.
Each unit of mining equipment in an inventory – regardless of whether or not it is connected to the grid or the internet – would incur a tax cost.
The Deputy Minister stated that the equipment “will be taxed in the same way as a casino is taxed,” whereby “the casino pays for each card table, regardless of the activity.”
The government also outlined its intention to increase its per-kilowatt tax charge for miners from the base rate of USD 0.0023 to 0.012.
And Sultangaziev added that the government also wanted to end the current exemption on VAT for mining hardware imports.
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Learn more:
– Crypto Tax Trends in 2022: Increased Reporting, Updated Rules, and a Wealth Tax Debate
– Bitcoin & Crypto Mining in 2022: New Locations, Technologies, and Bigger Players
– Analysts See Slower Bitcoin Hashrate Growth in 2022 Amid Market Correction
– Russian Central Bank Still Wants to Ban Bitcoin & Crypto Mining, Despite Backlash
– Hut 8’s ‘Ferrari of GPUs’ Ready for Ethereum’s PoS Move, Miner Open to M&A
– Bitcoin Mining CO2 Footprint Is Below 0.08% Of Global Total – CoinShares
