Kazakhstan’s State Revenue Committee of the Ministry of Finance announced that the country’s coffers have received 3.07 billion tenge (nearly $6.9 million) in tax payments from entities involved in digital currency minting in 2022. Since January 1, 2022, cryptocurrency miners in Kazakhstan have been required to pay taxes and fees. They have already transferred 240 million tenge (nearly $540,000) to the budget by April 27, 2023. The finance ministry reminded that all due payments for the first quarter must be made by May 25, 2023.
Impact of New Cryptocurrency Law in Kazakhstan
On February 6, 2023, Kazakh President Kassym-Jomart Tokayev signed the new law “On Digital Assets in the Republic of Kazakhstan,” which regulates crypto-related activities, including mining, and is accompanied by amendments to the tax code. Most notably, the legislation restricts miners’ access to cheap electricity after they were blamed for power shortages. According to Sergey Putra, Senior Coordinator for Governmental Relations at the National Association of Blockchain and Data Centers Industry in Kazakhstan, the adoption of the law shows Kazakhstan’s interest in the development of the crypto industry. However, he noted that the implementation of the law through by-laws is extremely difficult and not supportive of the crypto industry, especially for miners. Putra expressed hope that these are temporary issues and their solution would bring a new period of development for bitcoin mining in the country.
Kazakhstan became a crypto mining hotspot in 2021 when China cracked down on the sector. Attracting miners with subsidized electricity, it ranked third in terms of average global monthly hashrate in January 2022, as per data provided by the Cambridge Center for Alternative Finance. However, according to Norway-based industry analyst Jaran Mellerud, Kazakhstan’s share has since shrank from a peak of 18% in October 2021 to just 4% as of May 2023.