Bitcoin

Kazakhstan Suggests A 500% Tax Increase; Some Eye Relocating To The US, Russia

Bitcoin mining rigs are facing problems all over the globe. First, miners were evicted from China and later shifted to Kazakhstan. With its bountiful natural gas and cheap power, Kazakhstan led to miners going in droves. However, miners in Kazakhstan have been facing problems in the past few months because of internet blackouts and electricity shortages.

Kazakhstan rising fuel costs

Kazakhstan saw widespread civil unrest after rising fuel costs which led to the authorities severing internet and security clampdown. Things have slowly returned to normal, but Kazakh authorities have floated tighter regulatory conditions for bitcoin miners in recent days — a state of affairs that could spur some operations to leave the country for friendlier shores. As a result, miners are considering going for the US or Russia.

Local news outlets Kazinform reported on February 4 that Kazakh authorities are looking into hiking the tax on electricity for cryptocurrency miners from one tenge to five tenges (USD$0.0023 to $0.012).

Monthly tax on equipment

Worse, Marat Sultangaziev, Kazakhstan’s first vice-minister of finance, is mooting crypto miners to pay a monthly tax on equipment, whether or not they earn block rewards or even turn the ASICs on. The vice-minister compared the idea to a similar tax that casino operators pay on their machines.

Earlier Bagdat Musin, Kazakhstan’s minister of digital development, accused unregistered “gray” miners of consuming 1 gigawatt of the country’s electricity. Music has asked the general public to reveal details of unregistered mining operations.

The current rules in Kazakhstan distinguish so-called “gray miners” from so-called “white miners.” White miners have signed on to a new registry at the Ministry of digital development. Musin further asked unregistered gray cryptocurrency miners to come under the department’s new regime.
Earlier the government cut off cryptocurrency miners from electricity for most of January.

Kazakhstan faced widespread energy shortages and massive protests over surging fuel prices. The government cut off electricity throughout the country as those protests continued, triggering hash rate declines for major pools with exposure.

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