Kazakhstan may initiate increase in cryptocurrency mining tax
2 Min Read
After affecting the country's electricity grid, Kazakhstan plans to increase tax on the cryptocurrency industry.
-
Kazakhstan may initiate an increase in cryptocurrency mining tax.
The Kazakh Economic Minister, Alibek Kuantirov, stated that Kazakhstan may increase taxes on cryptocurrency mining because the industry has placed a strain on the country's electricity grid. Moreover, the spread of cryptocurrency mining drove up electricity demand in Kazakhstan in 2021.
Last week, on February 8, Kazakh President Kassym-Jomart Tokayev ordered his cabinet to audit the cryptocurrency mining industry. He stressed that his country is not against legal mining, but market participants must have licenses, receive electricity on adequate tariffs, declare their incomes, and pay taxes.
Read more: Kazakhstan blocks crypto mining until next month
"In order to fulfill the instructions to multiply the mining tax, the ministry is developing appropriate approaches," Kuantirov said at a government meeting, adding that the Ministry proposes a tenfold increase in tax from 1 to 10 tenge (to $0.023) per kilowatt-hour of electricity consumed.
He added that about 640 Mega Watts of electrical power is consumed by officially registered mining companies today. On the other hand, the Ministry’s report says that the illegal electricity consumption by miners may reach almost 1.4 gigawatts.
The latest research in the University of Cambridge found that Kazakhstan, as of August 2021, took second place with an 18.1% share in terms of bitcoin mining in the world. The first place was taken by the United States with 35.4%, the third by Russia with a share of 11.2%.
