Kazakhstan Will Raise Its Tax Rates On Bitcoin Mining Starting In 2023

Kazakhstan Will Raise Its Tax Rates On Bitcoin Mining Starting In 2023

Kassym-Jomart Tokayev, the president of Kazakhstan, has authorized higher tax rates for cryptocurrency miners, and tax office have been told to charge miners up to USD 0.052 per kilowatt-hour starting on January 1, 2023.

Currently, miners must pay a fixed fee of little more than USD 0.002 for each kWh used. But after a winter marred by power outages caused by crypto mining, the government decided to make bitcoin and crypto miners pay more.

The government started complaining in February that miners were paying “negligible” taxes on their earnings, and last month they tried to change the tax laws.

According to the country’s finance ministry, miners paid more than USD 15 million in taxes during the first quarter of the current fiscal year.

The new tax policy, which Tokayev approved on Monday, would be applied on a sliding basis. Users who pay a higher price for electricity would therefore pay a maximum of USD 0.052 per kWH of tax, whereas consumers who pay a lower price for electricity will pay as little as USD 0.002 per kWh spent, as opposed to paying a flat rate per unit of energy consumed.

This means that if electricity costs in the country rise, so will the tax bills for miners because energy prices tend to vary throughout the year.

The majority of miners work in Nur-Sultan, formerly known as Astana, the nation’s capital.

The good news for miners who choose to operate independently is that they will only be taxed at a rate of about US $0.02 per kWh when they use their own power sources.

Those that are able to employ renewable energy sources in their mining operations will only be required to pay tax rates of 0.002 per kWh.

The government has made it clear that it is willing to take tough action against unlicensed and unauthorized miners. It enacted a law earlier this year requiring all miners to register with a central agency and provide thorough reports on their operations.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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