This country plans that miners pay more taxes when bitcoin rises in price

This country plans that miners pay more taxes when bitcoin rises in price

Bitcoin miners continue to experience calamities in Kazakhstan where authorities have announced new plans to increase taxes and implement a charging scheme that involves linking the tax rate to the price of the cryptocurrency.

Kazakhstan’s Economy Minister Alibek Kuantyrov reported on his plans to impose a tax on bitcoin mining, which will increase tax revenue. This while cryptocurrency miners operate in the country with an additional charge for the electricity they consume.

“We are looking to raise taxes for miners. Currently, we are also looking to link the tax rate of miners to the value of the cryptocurrency. If the price of cryptocurrency goes up, it will be good for the nation’s budget,” the minister said.

For his part, the head of the National Association of Blockchain and Data Center Industry of Kazakhstan, Alan Dorjiev, explained that they are studying linking the tax with the price of bitcoin for each kilowatt hour consumed to mine the cryptocurrency.

Dorjiev added that the model to be applied is set a tax rate for a bitcoin market price of up to $40,000, and another fee if the value of the cryptocurrency exceeds that range. “And so on. But this is all something that is still being considered,” the official explained as reported by local media.

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During a previous meeting, the President of Kazakhstan, Kassym-Jomart Tokayev, had instructed officials to increase taxes on cryptocurrency miners. He also ordered the nation’s financial watchdog to identify all mining facilities in the country and examine their tax and customs documents.

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This country plans that miners pay more taxes when bitcoin rises in price

While all this is going on, Kazakhstan continues to lose its attractiveness for digital miningafter the country had become a magnet for bitcoin miners.

Cryptocurrency mining farm operator.
Bitcoin mining is getting more and more expensive in Kazakhstan. Source: Kalkine Media/ youtube.com

Last year, the Kazakh territory received hundreds of farms seeking refuge after leaving China, when the Chinese government prohibited all activities related to cryptocurrencies and condemned the practice of mining bitcoin and other cryptocurrencies.

Subsequently, the growing energy deficit suffered by Kazakhstan has led its government to take drastic measures against the sector. In fact, the electricity shortage has already forced some companies to leave the country.

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This country plans that miners pay more taxes when bitcoin rises in price

Local media have also reported that authorities in the Central Asian nation are considering quintupling the electricity tax miners are expected to pay. This is despite the fact that Kazakhstan recently introduced a surcharge of 1 tenge (approximately $0.0023) per kilowatt hour used to mine cryptocurrencies.

They blame digital mining for taking advantage of the tax exemption

At this time, the mining of bitcoin and other cryptocurrencies is under the scrutiny of the Kazakh authorities. Not only because of the energy deficiency that the country is currently going through, but also because the industry is accused of taking advantage of the advantages offered by the country for technological development.

Under the name of Astana Hub, the Kazakhstan technology park offers a special tax regime, infrastructure, visa support and other benefits for the development of innovative projects. An advantage that some startups focused on digital mining took advantage of to settle in the country.

However, representatives of the Astana Hub have pointed out this week that bitcoin mining companies or other cryptocurrencies should not benefit from the benefits that the country offers for technological development, warning that the hub was not created for that purpose.

Now, even thinking about changing the law to exclude mining companies from the Astana HUB IT technology park, such as announced it the chairman of its board Arman Abdrasilov.

Meanwhile, the big bitcoin miners, since January are looking to leave Kazakhstan, as reported by CriptoNoticias. Many fear that the political instability that has settled in the country since the start of 2022, and the threat of stricter regulations, will leave them bankrupt. That is why they are evaluating migrating, at least part of their operation, to destinations such as the US.

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