Auditors in Kazakhstan have identified five crypto mining enterprises that took advantage of tax cuts they were allegedly not supposed to benefit from. The firms registered as ‘innovative companies’ to avoid detection and then wrongfully received millions of dollars in tax preferences.
These are benefits normally afforded to businesses engaged in innovations development.
It has been reported that the five companies had become residents of the Astana Hub which may have made it easier for them to receive support for their investment projects in the field of cryptocurrency mining. This is because Astana Hub is considered to be the largest international technology park for IT start-ups in Central Asia supporting high-tech projects.
The five mining farms were granted tax preferences for 8.5 billion tenge or $18 million in the third quarter of 2021.
In legal terms, the miners have not technically broken Kazakstani law with one government official stating:
“These mining farms, as well as other entities and IT companies, have the right to register [at the tech park]. We are currently amending the registration rules to address this issue”.
The source added that any resident of the Astana Hub can rely on tax breaks, affordable office space, and other support.
According to a representative of the country’s Accounts Committee which oversees budget spending, this is an indication that the Digital Kazakhstan program is not being implemented correctly.
The Accounts Committee is now seeking to propose amendments in order to improve crypto legislation in this area.
In recent times, Kazakh authorities have floated tighter regulatory conditions for Bitcoin miners who have been blamed for the country’s growing power deficit. In February this year, President Kassym-Jomart Tokayev ordered the nation’s financial watchdog to identify all mining entities and check their tax and customs documents.
As a result, authorities closed down over 100 coin minting facilities across the country in mid-March, including legally operating Bitcoin farms.