Kassym-Jomart Tokayev, Kazakhstan’s president, called for a higher tax on cryptocurrency mining just weeks after a new charge went into force.
Tokayev stated the present rate of 1 Kazakh tenge ($0.0023) per kilowatt of power is insignificant, and he ordered the government to raise the tax as quickly as possible, as well as come up with a comprehensive proposal for crypto mining legislation by April 1. The tax took effect on January 1st.
According to local media sources, the new rate might be as high as 5 tenge per kWh, and miners may have to pay import duties on their equipment. First Vice Minister of Finance Marat Sultangaziyev stated the new rate could be as high as 5 tenge per kWh.
Crypto mining does not generate many employment and consumes a lot of electricity, according to the president, who also noted that some miners pay less for electricity than the general population. Imported equipment is also exempt from taxation.
Why Kazakhstan made this move
After China banned cryptocurrency mining in 2021, miners rushed to Kazakhstan. The central Asian country used to have a surplus of electricity, but since the inflow, the national infrastructure has struggled to keep up with demand.
On January 21, the national grid operator turned off the power to all mines.
The power outage was meant to run until the end of January, but miners claim it hasn’t been restored yet. The government is also attempting to eradicate “grey mining,” which refers to activities that have not been properly registered and licensed.
By March 19, the president has given the Financial Monitoring Agency the job of identifying all mining companies and checking their tax and customs records.
Tokayev stated the present rate of 1 Kazakh tenge ($0.0023) per kilowatt of power is insignificant, and he ordered the government to raise the tax as quickly as possible, as well as come up with a comprehensive proposal for crypto mining legislation by April 1. The tax took effect on January 1st.
According to local media sources, the new rate might be as high as 5 tenge per kWh, and miners may have to pay import duties on their equipment. First Vice Minister of Finance Marat Sultangaziyev stated the new rate could be as high as 5 tenge per kWh.
Does crypto mining actually create more job oppotunities?
Crypto mining does not generate much employment and consumes a lot of electricity, according to the president, who also noted that some miners pay less for electricity than the general population. Imported equipment is also exempt from taxation.
After China banned cryptocurrency mining in 2021, miners rushed to Kazakhstan. The central Asian country used to have a surplus of electricity, but since the inflow, the national infrastructure has struggled to keep up with demand.
On January 21, the national grid operator turned off the power to all mines. The power outage was intended to run until the end of January, but miners told CoinDesk that it hasn’t been restored yet.
The government is also attempting to eradicate “grey mining,” which refers to activities that have not been properly registered and licensed.
By March 19, the president has given the Financial Monitoring Agency the job of identifying all mining companies and checking their tax and customs records.
