Kazakhstan president signs law to increase Crypto mining tax

Nursultan Nazarbayev, Kazakhstan’s president, signed new legislation. It amends the Tax Code of the country. It adds many provisions to the implementation. Such revisions established varying rates of tax for crypto mining. As per reports, the president of Kazakhstan signed a bill that imposed heavier taxes on miners of Bitcoin in this country. It followed a shortage of power and occurrences of theft over the past few months.

Crypto miners in Kazakhstan have to pay higher taxes

For cryptocurrency miners in the country, tax rates of electricity usage start from very low such as KZT 1 per kWh. This exact tax rate will be determined depending on the average price of the amount of electricity that has been used for mining cryptocurrency coins.

This new tax law will bring about major changes to the tax code of Kazakhstan. The amount that is owed to the government as taxes will be determined by the electricity quantity used for mining crypto during a provided period of tax. The amount may range from 1 Kazakhstani tenge to 10 tenges. Start your trading journey with bitgratitude.

Yet miners of crypto utilizing renewable sources of energy will get charged the least tax amount. It is 1 tenge per kWh irrespective of the involved costs. On 1st January this year, the surcharge was enforced. It was after the Central Asian country witnessed one increasing power deficit throughout 2021. Such a shortage was blamed on the influx of cryptocurrency miners. It followed the decision of China to crack down on this industry in May last year.

After a blanket ban was imposed by China on the mining of crypto last year, Kazakhstan became a preferred destination for miners of Bitcoin. From then, the scenario of crypto mining in this country deteriorated. It was due to a lack of power as well as a huge number of mining operators.

New rates of tax will lower the load on the power grid of Kazakhstan 

The country tried limiting the mining of Bitcoin. They imposed limitations on the supply of electrical energy during the time of the cold winter. They also shut down coin-mining utilities in some territories. Few businesses got forced to move or relocate a huge part of their tools to another country because of the regulations. The severe conditions of the market pushed a lot of miners to bankruptcy.

In February, the president ordered some authorities to identify every crypto miner who operated in the country. He asked them to raise their taxes. Back in April, the state auditors were seen to go after mining businesses who allegedly exploited tax benefits they were never supposed to enjoy.

At this same time, the country was trying to bring some cryptocurrency exchanges to Nur-Sultan, called Astana previously and Kazakhstan’s capital city. Nur-Sultan’s government declared it is preparing to upgrade the tax burden for miners. This nation aims to test one pilot project to create and operate crypto exchanges in the AIFC or Astana International Financial Centre. In 2018 it was founded. The goal was to become a financial hub of Central Asia. One of their first proposals was to tie this new rate to the value of the crypto minted. As per official statements, these new tax rules are predicted to level the load on the power grid of the country. It will also discourage the mining electricity consumption that is produced domestically.

According to an earlier report, Kazakhstan was trying to root out mining operations that have no proper licensing for lowering the energy grid load of the country. In March, the country declared 106 mines closed. Thus it seized 67000 machines priced at $193 million. The government needed cryptocurrency miners in May to register all operations with their authorities.

Conclusion

The new rates of tax may be the final straw breaking the back of the camel. Recently, a Bitcoin mining firm named Compass Mining laid off almost 15 percent of its workers. It was a result of major market conditions. The firm stated that these layoffs were because of the implementation of huge compensation and spending cuts across the rest of their business. If you want to see more details like this then visit dfaho.com