Crypto miners paid millions in energy taxes last year after mining operations were regulated.
The government of Kazakhstan received 3.07 billion tenge (approximately $7 million) in taxes from cryptocurrency mining entities in 2022 after implementing a revised law regulating the tax burden on cryptocurrency mining, according to local media reports.
Preliminary government figures for 2023 show mining fees collected totaled 240 million tenge as of April 27, more than $541,000 at the time of writing. These figures are far lower than the 652 million tenge (about 1.5 million U.S. dollars) in taxes paid in the first quarter of 2022.
Kazakhstan is one of the most important bitcoin mining centers in the world. According to the Cambridge Center for Alternative Finance, the Central Asian nation contributed 13.22% of Bitcoin’s total hash rate in January 2022, second only to the United States (37.84%) and China (21.11%).
Related: Can Canada Continue to Be a Crypto Mining Hub After Manitoba Suspends?
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The country imposed a digital mining tax on January 1, 2022, based on the electricity consumption of mining entities. As reported by Cointelegraph, the law comes amid growing discontent across the country that cryptocurrency miners are not being paid enough to use the national grid. The revised legislation is also considered a further legal avenue amid tightening global regulations.
A wave of foreign mining operators relocated to Kazakhstan during the 2021 bull market, affecting an already difficult relationship between the country and miners. Some estimates suggest more than 87,849 drilling rigs have moved into Hong Kong by November 2021 as a result of China’s crackdown on mining activity.
Recently, the government announced plans to introduce new cryptocurrency regulations to curb tax fraud and illegal business activities. One of the proposals would require the government to approve issuers of secure digital assets, while another would require miners to sell at least 75% of the cryptocurrency they earn through registered exchanges. The move is expected to reduce tax evasion.
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