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The government of Kazakhstan has collected 3.07 billion tenge (approximately $7 million) in tax revenues from cryptocurrency mining operations in 2022, following the enactment of a revised law that governs the fiscal responsibilities of mining cryptocurrencies, as reported by local media.
Initial figures from the government for 2023 indicate that mining fees accumulated by April 27 reached 240 million tenge – equivalent to over $541,000 at the time of this report. These amounts are significantly lower than the 652 million tenge (~$1.5 million) in fees recorded during the first quarter of 2022.
Kazakhstan is recognized as one of the leading Bitcoin mining centers globally. As of January 2022, the Central Asian nation accounted for 13.22% of the overall Bitcoin hash rate, trailing only the United States (37.84%) and China (21.11%), according to data from the Cambridge Centre for Alternative Finance.
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The country implemented taxes on digital mining starting January 1, 2022, based on the electricity consumption of mining operations. This legislation was introduced in response to increasing national dissatisfaction with the under-taxed use of the national power grid by cryptocurrency miners, as reported by Cointelegraph. The revised law was also viewed as a legitimate avenue for further adoption amid tightening global regulations.
A surge of foreign mining operators moved to Kazakhstan in 2021 during the previous bull market, complicating the already strained relations between the nation and miners. Some estimates suggest that over 87,849 mining rigs were brought into the country by November 2021 following China’s crackdown on mining activities.
Recently, the government revealed intentions to implement new cryptocurrency regulations aimed at combating tax fraud and illegal business practices. One of the proposals includes requiring government approval for issuers of secured digital assets, while another would mandate that miners sell at least 75% of their mined cryptocurrency through registered exchanges. This initiative is anticipated to help mitigate tax evasion.
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