Crypto Miners In Kazakhstan to Have New Licensing and Taxation

Kazakhstan, one of the key destinations for crypto mining activities, is now looking to bring mandatory licensing for all crypto miners operating in the country. Mazhilis, the lower house of Kazakhstan’s parliament introduced the bill on Wednesday, October 12.

As TASS reported, the parliament lawmakers introduced an industry bill on cryptocurrencies along with four other bills. The purpose of the bill will be to create a legislative framework for the production and circulation of digital assets. These bills seek to address the hurdles in the legal regulation of digital mining.

Ekaterina Smyshlyaeva, a member of the Mazhilis Committee on Economic Reform, said that the Kazakhstan government has planned to introduce legal mechanisms for regulating electricity consumption by crypto miners. The Ministry of Energy will further set quotas based on the volumes of energy consumption.

The deputy further added that the bills will make it possible to unlock new opportunities and attract investments for building new energy generation plants. Smyshlyaeva further noted that the previous mining activities were carried out in the cloud services by non-residents. She added:

“Kazakhstan was used as a raw material appendage of the blockchain industry. By bills, we oblige miners to be licensed in Kazakhstan, that is, to create legal entities and become full-fledged subjects of taxation. Mining pools are also becoming part of the economy.

Bills provide a connection between the production and circulation of digital assets in one ecosystem. At the same time, the activities of miners and mining pools will be regulated and licensed by the Ministry of Digital Development, Innovation and Aerospace Industry”.

Taxes for Crypto Miners

The new licensing framework will also bring a new taxation structure for the crypto miners of Kazakhstan. Starting 2024, crypto miners will have to exchange up to 75% of their capital on domestic crypto exchanges.

Currently, the government has levied value-added taxes on the import of crypto mining equipment. They further plan to levy corporate income tax on crypto miners’ remuneration. In addition, there will be a tax on the mining pool income.

Besides, more than 1 million Kazakhstan citizens currently trade on international exchange. The government is planning to bring them all on local exchanges.

“By transferring all cryptocurrency transactions to Kazakhstani exchanges, we make them transparent. Crypto exchanges are subjects of financial monitoring and, according to the project, will be integrated with the information systems of the State Revenue Committee. The introduction of a registry of mining equipment will exclude the operation of illegal data centers, and licensing will finally solve the problem of gray miners, will ensure the security and balance of the energy system,” said Smyshlyaeva.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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