BTC Miners In Kazakhstan Will Pay Taxes Correlated To The BTC Price

BTC miners in Kazakhstan will pay taxes correlated to the Bitcoin price and it could soon translate into even more taxes so let’s read more in today’s latest Bitcoin news.

As it was once considered an attractive country for the Chinese BTC miners after the country’s crackdown on mining, Kazakhstan seems to be set to create new taxes which will negatively impact the industry. The Minister of National Economy Alibek Kuantyrov said that the team in his office is planning a tax plan that will link tax payments to the valuation of the mixed tokens. As per his statemetn, the reprots by ForkLog show that this can help the country financially in the tax collection and translates into an improvement for the budget of the country. However, the decision will cause most miners to explore other countries like El Salvador where the mining tax will be a flat 10% to finance the construction of Bitcoin City.

“We are considering increasing the tax burden for miners, at the moment we are also considering linking the tax rate for miners to the value of the cryptocurrency. If the cryptocurrency grows, it will be good for the budget.”

1|6 Kazakhstan #bitcoinmining trying to retaliate position of going from "hero to zero". Over the last 4 years the community did a massive step in establishing new sector in the country and building strong global position as bitcoin mining hub. >>

— Denis Rusinovich (@DenisRusinovich) October 22, 2021

The Kazakhstan government welcomed the miners with open arms but this stance changed a few months later. The BTC miners in Kazakhstan went from getting one of the cheapest energies in the world for mining to introducing the mining tax of 20 cents per Kwh in a month and the energy cost multiplied by 10 arguing that the energy demand by the miners grew exponentially. Besides the taxes, the governemnt started shutting down most mining farms and turned the so-called paradise into a headache for the BTC mining industry.

The co-founder of crypto mining group Denis Russinovich is a company that operates since 2017 in the country and said that from one moment to another, the country went from being a hero to nothing and condemn the regulatory measures implemented by the government. The Director of Kazakhstan’s National Association of Blockchain Alan Dorjiyev said that the government is also considering a tax on energy correlated to the BTC price:

“A gradation is being considered: for example, up to $40,000 [bitcoin price] one tax, over $40,000 another tax, and so on. But this is still at the level of discussions.”

At the moment, conducting mining activities in the country can be counterproductive considering that any moment now, another increase in the power tariff can be announced and the repeated power outages that the miners except to end in most locations, and Dorjiyev claims that were not fully restored.