President of Kazakhstan Tokayev has signed a new law amending the country’s law “On Taxes and Other Mandatory Payments to the Budget” and a supplementary law improving the application of the Tax Code. Differentiated tax rates for mining cryptocurrencies are now included in the amendments.
The exact levies will be calculated based on the typical cost of the electricity used to mint coins over a given tax period. For example, when a miner pays 25 tenges or more ($0.053) per kWh, they start at 1 Kazakhstani tenge (roughly $0.002 at the time of writing), and they can go up to 10 tenges if the electricity tariff is between 5 and 10 tenge ($0.011–$0.02).
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No matter how expensive the electricity is, crypto farms will pay the lowest tax rate of 1 tenge per kWh. After the nation of Central Asia experienced a growing power deficit the previous year, that surcharge became effective on January 1, 2022.
New Law to Reduce Load on Nation’s Power Grid, Government Says
Kazakhstan also tried to reduce cryptocurrency mining, shutting down coin minting operations throughout the country’s regions and placing restrictions on electricity supply during the chilly winter. Due to the measures, some businesses were forced to relocate to other mining hubs or export a sizable portion of their equipment.
President Tokayev directed the pertinent agencies to track down and increase the taxes on all cryptocurrency miners operating in Kazakhstan in February. In addition, state auditors pursued mining companies in April who they claimed had taken advantage of tax breaks they weren’t authorized to receive.
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In that same month, the Nur-Sultanian government declared it was getting ready to raise the tax burden for miners, and one of the initial ideas was to link the new rate to the price of the newly created cryptocurrency. Official statements claim that the new tax regulations are intended to reduce domestic electricity consumption for mining while also balancing the load on the power grid.
