President of Kazakhstan signature A bill that applies a differentiated tax rate based on the energy consumption of crypto miners on July 11.
The new bill has changed national legislation on taxes and other mandatory payments on budgets. The tax rate starts at a minimum of 1 tenge (about $ 0.002) per kilowatt hour and is increased based on the amount of electricity consumed for mining during a particular tax period.
Even mining farms that use renewable energy sources can’t dodge the new tax law and, despite the lowest tax rates, pay one tenji per kilowatt hour.
Mining giant Kazakhstan
The cool climate of Kazakhstan and the abundance of coal mining made Kazakhstan ideal for mining activities. August 2021, Kazakhstan sponsored With 18.1% of the world’s hash rate, it is the second country with the most mining activity.
Most companies have set up mining farms in the area. In addition, China has also taken advantage of China’s mining ban. Companies that fled China due to bans set up stores in Kazakhstan and significantly increased their mining activities.
Changes in attitude towards the mining industry
Things were going well for miners in the region, but the energy crisis caused electricity prices to skyrocket in November 2021. The country considered every option to keep miners within the border, but failed. Most miners fled the country to set up a business in a nearby country, significantly lowering the country’s hash rate.
After the energy crisis, Kazakhstan changed mind and decided to weaken its adaptation to miners. In January 2022, the county cut off miners’ power for a month so they could survive the energy crisis. Next month, MPs proposed a new law to discourage miners in the area. The new proposal proposes to tax cryptocurrency mining equipment in the same way as gambling machines.
In May 2022, the county tightened the rules for crypto miners, forcing them to report energy consumption data at least 30 days before the start of operations.
Based on the power consumption of Cambridge Bitcoin indexKazakhstan currently has the third highest monthly hash rate.
Based on January 2022 data, Kazakhstan provided 13.22% of the world’s hash rate, following China (21.22%) and the United States (37.84%). Due to additional taxation and bureaucratic burden, this rate may be lower in Kazakhstan in the future.
