Kazakhstan President Kassym-Jomart Tokayev has signed into law a bill that imposes higher tax rates on crypto miners working in the country. Cryptocurrency mining, as the name suggests, is the process of creating new cryptocurrencies into circulation. A highly competitive process, crypto mining uses a proof-of-work method to verify and add new transactions to the blockchain. As per Kazakhstan’s new Tax Code, the hiked tax will depend on the average price of electricity and the amount used for the mining process, as first reported by Bitcoin.com.
Electricity usage tax rates for crypto miners in Kazakhstan reportedly start from as low as KZT 1 (roughly Rs 0.17) per kilowatt-hour. As mentioned, the exact rate of tax will be determined based on the average price of the amount of electricity used to mine crypto coins.
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Miners who use renewable energy will pay the lowest tax, at KZT 1 per kilowatt-hour. Last year, the country saw a growing deficit of power. These shortages were largely blamed on the boom in crypto mining in the country, especially after China cracked down hard on crypto miners in 2021. In order to deal with the sudden influx, Kazakhstan imposed restrictions on the supply of electricity during the winter months and even went ahead with temporarily shutting down mining facilities. In February, President Tokayev ordered authorities to identify crypto miners in the country and raise their taxes.
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