Kazakhstan Generates Around $7 Million in Tax Revenue from Cryptocurrency Miners in 2022

• As of April 27th, the government has accrued 240M tenge in mining fees this year alone.
• The Central Asian country accounted for 13.22% of the total Bitcoin hash rate.

Reports from local media suggest that in 2022, following the implementation of a new regulation aimed at managing the financial obligations of cryptocurrency mining, the government of Kazakhstan received 3.07 billion tenge (approximately $7 million) in tax revenue from crypto mining enterprises.

As of April 27th, 2023, the government has generated 240 million tenge in mining fees this year, equating to over $541,000 at the current exchange rate. These figures are significantly lower than the fees recorded in the first quarter of 2022, which amounted to 652 million tenge (around $1.5 million).

Data from the Cambridge Centre for Alternative Finance indicates that in January 2022, the Central Asian nation contributed 13.22% of the total Bitcoin hash rate, placing it third after the United States (37.84%) and China (21.11%).

Crackdown on Tax Evasion

On January 1, 2022, the country implemented tariffs on digital mining based on the electricity consumption of mining operations. This regulation was enacted in response to growing public dissatisfaction regarding the under-taxed utilization of the national power grid by crypto miners.

In 2021, during the previous bull market, a significant influx of multinational mining operators relocated to Kazakhstan, exacerbating the already strained relationship between the government and the mining sector.

New regulations concerning cryptocurrency have recently been introduced by the government to combat tax evasion and illicit business activities. Among the proposals is a requirement for issuers of secured digital assets to obtain government approval, as well as a stipulation that miners must sell at least 75% of their cryptocurrency profits on regulated exchanges. This initiative aims to mitigate tax avoidance.