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Kazakhstan sanctioned a new tax rate policy to crypto miners

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Joyashree Dey Follow

INDIA

Jul, 19 2022

Jul, 19 2022

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Kazakhstan President Kassym-Jomart Tokayev has sanctioned new tax rates for crypto miners – and tax bodies have been told to charge miners at a pace of up to USD 0.052 per kilowatt hour (kWh) from January 1, 2023.

As of now, miners have to pay a flat rate of just over USD 0.002 per kWh consumed. However, following a winter that was blighted by crypto mining-related power shortages, the government set out to compel bitcoin (BTC) and crypto miners to pay more.

The government started to wail over the fact that miners were paying “negligible” taxes on their earnings back in February and last month tried to make changes to the tax code.

Kazakhstan finance ministry claimed that in Q1 of the current financial year, miners paid more than USD 15m in tax.

The new tax measure, which will operate on a sliding scale, was signed into law by Tokayev on Monday. As such, instead of paying a flat rate per unit of energy consumed, users who pay a higher electricity price will pay a maximum of USD 0.052 per kWh of tax, while consumers who pay less for electricity will pay as little as USD 0.002 per kWh consumed.

As energy prices will quite often differ consistently, this will intend that as power costs rise in the country, so too will miners’ tax bills.

Most miners operate in the nation’s capital Nur-Sultan, which was previously known as Astana.

On the good side, miners who are using their power sources will be taxed at a rate of around USD 0.02 per kWh, and those who can use renewable power sources in their mining efforts will have to pay tax rates of just 0.002 per kWh.

The government has indicated that it is prepared to take action against unlawful and unregistered miners. Recently, it introduced a legal requirement forcing all miners to register with a central body and give detailed reports on their operations.


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Joyashree Dey

CBW - External Analyst

INDIA

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