After China’s ban on crypto mining, Kazakhstan had taken the advantage of fleeing crypto miners by providing a safe mining environment with cheap electricity. However, with the growth of crypto mining, the electricity grid felt the demand of the new sector which led to electricity woes in the country. Now, the Tax Code of Kazakhstan is looking to impose higher tax rates on crypto miners.
President of Kazakhstan Kassym-Jomart Tokayev has signed a new bill amending the crypto mining regulations in the country. The bill will also make mandatory changes to the Tax Code of the country.
According to Tokayev, the average cost of the electricity used to make coins will determine the tax rate. The changes will take effect from January 2023 and the current price of 1 Kazakh tenge (US$0.0021) at the time of writing. Crypto farms using electrical energy generated from renewable sources will pay the lowest tax rate at 1 tenge per kWh, regardless of its cost.
Besides this, the new law will boost the application of the Tax Code and tax rates for mining crypto. In addition, the new Tax Code will see the personal income tax rate rise from 5% to 10%.
However, Dividends on securities registered on a Kazakhstani stock market not exchanged during the relevant tax period are free from the deduction.
Kazakhstan also made an effort to reduce cryptocurrency mining and shut down coin minting operations during the “crypto winter”. For that, the country has imposed limits on electricity supply throughout the country. Moreover, the measures forced some companies to relocate to other mining hotspots or move a significant portion of their equipment out of the country.