- The President of Kazakhstan has signed a law increasing the tax on crypto mining.
- The tax will be calculated based on the amount and cost of electricity used in mining digital currencies like bitcoin.
- According to the authorities, the new tax burdens will reduce the pressure on the energy network while increasing revenues.
The President of Kazakhstan, Nursultan Nazarbayev, has sign a new piece of legislation that amends the country’s tax code and adds several provisions to its implementation.
The revisions establish variable tax rates for cryptocurrency mining. According to reports, the president of Kazakhstan has signed a bill imposing heavier taxes on bitcoin miners in the country following a power outage and thefts in recent months.
The new tax law will bring significant changes to the Kazakh tax code. The amount owed to the government for taxes will be determined by the amount of electricity used to mine crypto during a given tax period. The amount can range from 1 Kazakh tenge to 10 Kazakh tenge (approximately $0.0021 to $0.021 at the current USD exchange rate).
However, crypto miners who use renewable energy sources will be charged the least tax, which is 1 tenge per kWh, regardless of the costs involved.
After China imposed a blanket ban on crypto mining in 2021, Kazakhstan has become a popular destination for bitcoin miners. Since then, the crypto mining scenario in the country has deteriorated due to a lack of energy and a huge number of mining operators.
Kazakhstan has attempted to limit bitcoin mining, imposing limitations on electric power supply during the cold winter and shutting down coin-minting utilities in its territories. Some companies have been forced to relocate or relocate much of their equipment to another country due to regulations. Extreme market conditions have pushed many miners to the brink of bankruptcy.
The new tax rates could be the straw that breaks the camel’s back. Compass Mining, a Bitcoin mining company, recently laid off 15% of its workers due to extreme market conditions. The company said the layoffs were due to “the implementation of significant compensation and expense cuts” across the rest of the business.