Kazakhstan’s revenue from cryptocurrency mining taxes reached $7 million in 2022.
Local media reports state that Kazakhstan’s government collected tax payments worth around $7 million in 2022 from crypto mining entities after enforcing a revised law that regulates the fiscal burden of mining digital currencies. The tax revenue is equivalent to 3.07 billion tenges.
As of April 27, 2023, the government’s initial records indicate that mining charges collected amounted to 240 million tenges, equivalent to more than $541,000. This amount is notably lower compared to the 652 million tenges or approximately $1.5 million paid in the first quarter of the previous year, as per reports.
Kazakhstan is one of the major centers for Bitcoin mining globally. Data from Cambridge Centre for Alternative Finance revealed that the country ranked third, after the United States and China, in terms of the percentage of total Bitcoin hash rate it contributed, as of January 2022. At that time, Kazakhstan accounted for 13.22% of the total hash rate, while the US and China contributed 37.84% and 21.11%, respectively.
In response to concerns about the low taxation of cryptocurrency mining’s energy usage in the country, Kazakhstan introduced a law on January 1, 2022, that imposed taxes on digital mining based on the amount of electricity consumed by mining companies. According to sources, the new regulation was perceived as a means of promoting further adoption while adhering to increasing global regulatory requirements.
In the aftermath of China’s mining crackdown in 2021, a large number of foreign mining operators moved to Kazakhstan, leading to complications in the country’s relationship with miners. By November 2021, over 87,849 mining rigs had reportedly been transported to the region, according to some estimates.
In an attempt to curb tax fraud and illegal business activities, the government has revealed new cryptocurrency regulations. Among the suggestions is one that mandates secure digital assets issuers to gain approval from the government, while another requires miners to sell a minimum of 75% of earned cryptocurrencies on registered exchanges. The measures are intended to lower tax evasion.