Kazakhstan Collects $7 Million in Tax From Crypto Miners in 2022
In 2022, the Kazakhstan government generated tax revenues of 3.07 billion tenge (equivalent to approximately $7 million) from crypto mining businesses after implementing a new regulation to manage the financial impact of this industry.
As of April 27th, 2023, the government has collected 240 million tenge in mining fees, amounting to over $541,000 at current exchange rates. However, these figures are significantly lower than the first quarter of 2022 when mining fees totaled 652 million tenge (around $1.5 million).
The Cambridge Centre for Alternative Finance reported that in January 2022, Kazakhstan accounted for 13.22% of the global Bitcoin hash rate, ranking third behind China (21.11%) and the United States (37.84%).
Crackdown on Tax Evasion
From January 1, 2022, the government of the nation imposed tariffs on digital mining that varied based on the amount of power consumed by mining operations. This new regulation was put in place due to public resentment over the under-taxed usage of the national power infrastructure by crypto miners.
In 2021, during the previous bullish market, a significant number of global mining operators relocated to Kazakhstan, exacerbating the already strained relationship between the government and the mining sector. Recently, the government introduced new cryptocurrency restrictions to combat tax evasion and illegal business practices.
One proposal requires issuers of secured digital assets to obtain government authorization, while another requires miners to sell at least 75% of their cryptocurrency gains on regulated exchanges. The objective is to curb tax evasion.
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