• Kazakhstan has collected over $7 million in taxes this and last year from enterprises mining cryptocurrency.
• A new law regulating crypto-related activities, such as mining, has been enforced in the country, restricting miners’ access to cheap electricity.
• The adoption of the law demonstrates Kazakhstan’s interest in the development of the crypto industry while creating additional problems related to other laws or regulations.
Kazakhstan Collects $7 Million in Taxes from Miners
The government of Kazakhstan has collected over $7 million in taxes this and last year from enterprises mining cryptocurrency in the country. Miners are required to pay taxes and fees since Jan. 1, last year, with all due payments for the first quarter having to be made by May 25.
New Law Regulates Crypto Activities and Restricts Access to Cheap Electricity
On Feb. 6, President Kassym-Jomart Tokayev signed a new law “On Digital Assets in the Republic of Kazakhstan” which regulates crypto-related activities such as mining and is accompanied by amendments to the tax code. Most notably, it restricts miners’ access to cheap electricity after they were blamed for power shortages.
Kazakhstan Shows Interest in Developing Crypto Industry
The adoption of the law demonstrates Kazakhstan’s interest in developing the crypto industry while creating additional problems related to other laws or regulations. Sergey Putra, Senior Coordinator for Governmental Relations at the National Association of Blockchain and Data Centers Industry said miners have been disconnected from local sources of electricity for more than a year even amid surplus from energy producing companies due an additional tax for consumed electricity increasing cost per kilowatt-hour.
Crypto Sector Facing Uncertain Future
The news comes amid growing regulatory pressure that is limiting the industry’s access to low-cost energy while increasing its tax burden. As operators face higher expenses and more challenges under new legislation it remains uncertain what will happen next with cryptocurrency mining sector in Kazakhstan.
Cryptocurrency Mining Tax Contribution Growing Globally
Kazakhstan is not alone when it comes taxation on cryptocurrencies as countries around globe increasingly look into ways how to benefit financially form digital asset activities taking place inside their borders with some countries introducing special licenses with specific requirements allowing firms involved in blockchain operations lawfully operate within their jurisdictions while paying dues accordingly