Kassym-Jomart Tokayev, the president of the third-largest mining nation, Kazakhstan, recently signed a tax reform bill to increase the electricity tax rate for cryptocurrency miners by up to 10 times.
Kazakhstan has introduced a special tax system for the cryptocurrency mining industry since January 1 this year, requiring miners to pay electricity tax according to the actual electricity consumption, and levy 1 tenge (about 0.002 US dollars) for every 1 kWh of electricity consumed.) tax.
As for the tax reform of the Kazakh government this time, it is to distinguish power consumption groups of different intensities to formulate individual appropriate mining tax rates. The specific tax rate will be based on the average cost of electricity to the miner during the tax period, which varies by region:
At a cost of electricity of 5-10 tenge per 1 kWh, the tax rate is 10 tenge
At the cost of electricity of 10-15 tenge per 1 kWh, the tax rate is 7 tenge
At a cost of electricity of 15-20 tenge per 1 kWh, the tax rate is 5 tenge
At a cost of electricity of 20-25 tenge per 1 kWh, the tax rate is 3 tenge
The tax rate is 1 tenge on the cost of electricity exceeding 25 tenge per 1 kWh
Miners using renewable energy are taxed at 1 tenge per kWh, regardless of the cost of electricity.
According to the official statement, the new tax rules, which will take effect from January 1 next year, are expected to balance the load on the grid and curb the excessive consumption of domestically produced electricity by mining farms.
After China cracked down on cryptocurrency mining in May last year, many miners began to relocate to neighboring Kazakhstan, and the massive increase in electricity demand led to a shortage of domestic power supply, forcing power supply restrictions and mining farms to close during the cold winter. At present, several bitcoin mining farms have been forced to leave Kazakhstan due to increased taxes and power shortages.
Post time: Sep-04-2022