Kazakhstan’s days as a favorite destination for crypto miners might be coming to an end. Kazakh president, Kassym-Jomart Tokayev, has signed a bill hiking taxes imposed on miners.
The legislation will set in changes to the Kazakh tax law. The amount owed to the government as taxes will depend on the amount of electricity used to mine crypto during a specified tax period. The amount can range from 1 Kazakhstani Tenge to 10 Kazakhstani Tenge. However, crypto miners using renewable energy sources will be taxed the tiniest amount, i.e., 1 tenge per kWh. This is regardless of the costs involved.
Are Kazakhstan’s crypto days over?
The government said the new tax rates are a measure for the state to reduce the nation’s energy supply burden. The country restricted energy supply during winter and shut down many crypto mining firms.
This is not the first time the Kazakh government has gone against crypto miners. In January, the government began charging an extra tax of 1 tenge for 1 kWh of power used for mining. Then again, in February, the president ordered authorities to identify crypto miners for additional taxes. In April, state auditors pursued mining companies who claimed had taken advantage of tax benefits they weren’t authorized to receive.
China initially held the crown for crypto mining. However, that changed when the country announced a blanket ban on cryptocurrencies. Many miners then migrated to Kazakhstan. But Kazakhstan’s sudden change in attitude has led many miners to again relocate to more friendly countries. The US has become the top destination for miners in the last few months.
Furthermore, the former Soviet State had a conversation with Russian President Vladimir Putin on the day the new tax law was passed. The country has been looking very closely at the crypto industry and plans to roll out its digital currency soon.
