Kassym-Jomart Tokayev, the president of Kazakhstan, advocated for a higher tax on cryptocurrency mining merely weeks after a new charge went into force, local news outlets reported on Tuesday. He noted,
“It is necessary to identify all mining farms, check tax and customs issues, and at the same time carefully study the contracts on the basis of which the technical conditions were obtained, as well as other aspects of the activity. Please report by March 19.”
President Tokayev stated that the present rate of 1 Kazakh tenge ($0.0023) per kilowatt of power is insignificant, and he ordered the government to raise the tax as quickly as possible, as well as draw up a comprehensive proposal for crypto mining legislation by April 1. The tax took effect on 1 January 2022.
Reports stated that Crypto mining does not generate much employment and consumes a great deal of electricity, according to the president, who also noted that some miners pay less for power generation than the general population. Imported technology is also exempt from taxation.
Marat Sultangaziyev, Kazakhstan’s First Vice Minister of Finance, declared a rise in the mining rate of taxation from one to five tenge. In addition, the country would impose a special tariff on mining equipment, according to local media reports.
Sultangaziyev, speaking at the Ministry of Justice’s Interdepartmental Commission on Legislative Activities, said that under the deputies’ draught law “On Digital Assets in the Republic of Kazakhstan” and its accompanying amendments, significant tax agents will be established to pay the tax on mining, which will be data centers.
Kazakhstan attempts to close the income gap by raising tariffs on all minings
President Tokayev instructed his administration to increase tax income from the mining industry, which he claimed was benefiting from rising metal pricing.
In perspective, Kazakh’s president said,
“I am ordering the government to come up with a plan (to bring) additional revenues to the budget. In exchange we can provide large incentives for the exploration and development of new deposits for large mining and other companies.”
President Tokayev encouraged big corporations to contribute regularly to a new charitable organization, halted the wages of senior federal workers, and said the government must abolish monopolies and ensure fair competition, among other things.
However, Kazakhstan stands second in cryptocurrency mining, worldwide, according to media reports.