Crypto mining has been a hot topic of discussion especially this year with China taking drastic measures by imposing action on some mining areas in China.
Of late the influx of crypto miners has skyrocketed in recent weeks. Therefore, the government began to take steps to intervene in this. Kazakhstan is currently considering ending a tax -free policy for crypto miners and mining centers.
Lawmakers reportedly in the plan proposed changes to the Tax Code of Kazakhstan to stop the uncontrolled use of electricity used by crypto mining.
The amendment proposes a very minimum tax payment of one tenge per kilowatt per hour starting January 1.2022 if the proposal is adopted.
Some argue that the tax is like a nominal fee. Based on the data, crypto mining in Kazakhstan currently consumes 3.3% of the country’s total energy consumption annually.
According to local agency estimates, there are currently 13 crypto mining centers in Kazakhstan and the country accounts for 6.17% of total Bitcoin mining operations. Apart from China, the country is almost in line with large economic countries such as Russia (6.29%) and the United States (7.15%).
According to the Ministry of Digital Development, Innovation, and Aerospace, crypto mining operations in Kazakhstan generate revenue of $ 18- $ 25 million per month. However, the proposal met with opposition from crypto miners.
Alan Dorjiev, president of the Kazakhstan blockchain association said:
"The implementation of new additional taxes in certain industries, in this case in the crypto mining industry can have an impact in terms of investment attractiveness." Dorjiev added that the cost of electricity in Kazakhstan is now on par with the US, Norway, and Iceland. Thus introducing additional taxes will encourage local mining to operate elsewhere.
