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Kazakhstan collected $7M in crypto mining taxes in 2022

Kazakhstan collected $7M in crypto mining taxes in 2022

The government of Kazakhstan generated tax revenues of 3.07 billion tenges (around $7 million) from crypto mining entities in 2022 after implementing an amended law that regulates the fiscal burden of mining cryptocurrencies, as per reports from local media.

Preliminary numbers for 2023 indicate that mining fees collected until April 27th amounted to 240 million tenges, which is over $541,000 as of writing this article. However, this figure is significantly lower than the fees worth 652 million tenge (about $1.5 million) that were paid during the first quarter of 2022.

Kazakhstan is one of the top Bitcoin mining hubs globally. According to data published by the Cambridge Centre for Alternative Finance, the Central Asian nation contributed 13.22% of the total Bitcoin hash rate, just behind China (21.11%) and the United States (37.84%) as of January 2022.

Related: Can Canada stay a crypto mining hub after Manitoba’s moratorium?

On January 1, 2022, the country implemented taxes on digital mining based on electricity consumption by mining entities. The move came amidst growing national frustration with crypto miners’ untaxed usage of the national power grid. The amended legislation was also viewed as a legal path to ensure further adoption amid worldwide tightening of regulations.

During the 2021 bull market, a wave of foreign mining operators moved to Kazakhstan, which worsened the country’s already complex relationship with miners. As per some estimates, more than 87,849 rigs were brought to the area by November 2021 in the aftermath of China’s crackdown on mining activities.

Recently, the government announced its plan to introduce new crypto regulations aimed at countering tax fraud and unlawful business operations. One of the proposals calls for government approval for secured digital asset issuers, while the other would require miners to sell at least 75% of crypto earned through registered exchanges, which is anticipated to decrease tax evasion.

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