Kazakhstani Crypto Miners Pay $6.9M In Taxes To Government
Kazakhstan’s government has received tax payments worth 3.07 billion tenge, equivalent to $6.9 million, from entities involved in cryptocurrency mining in 2022. The announcement was made by the State Revenue Committee of the Ministry of Finance, as quoted by local media and crypto news outlet Forklog.
The Kazakh government collected more than $7 million in taxes this year from crypto mining in the country, including $6.9 million in 2022 and $540,000 as of April 27. Miners in the country began to pay taxes and fees on January 1 last year. https://t.co/rqkgCXnNIo
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Crypto Mining Taxes
The country has required cryptocurrency miners to pay taxes and fees since January 1, 2022, with a due date for the first quarter set on May 25. By April 27, cryptocurrency miners had already transferred 240 million tenge or $540,000 to the budget.
President Kassym-Jomart Tokayev signed the new law “On Digital Assets in the Republic of Kazakhstan” on February 6, 2023, which regulates cryptocurrency-related activities, including mining, and is accompanied by amendments to the tax code. One of the provisions restricts miners’ access to cheap electricity, which was blamed for power shortages. According to Sergey Putra, the Senior Coordinator for Governmental Relations at the National Association of Blockchain and Data Centers Industry in Kazakhstan, the implementation of the law through by-laws is challenging and does not support miners and the crypto industry as a whole.
Crypto Mining Dominance
Despite these challenges, Kazakhstan has become a crypto mining hub, particularly after China cracked down on the sector in 2021. The country attracted miners with subsidized electricity and was ranked third globally in terms of average monthly hashrate in January 2022, as per data from the Cambridge Center for Alternative Finance. However, the country’s share has since shrunk from a peak of 18% in October 2021 to just 4% as of May 2023, according to Norway-based industry analyst Jaran Mellerud.
The adoption of the new law demonstrates Kazakhstan’s interest in developing the crypto industry. However, there are still issues related to other laws or regulations, including taxes on consumed electricity that prevent miners from seeking low-cost electricity sources. The industry hopes that these temporary issues can be resolved to enable the sector to continue to grow.
