In Nur-Sultan, five mining companies received tax breaks from the state under the guise of innovative startups. Local media report this.
Violations were uncovered during an audit of residents of the Astana Hub international IT technopark.
“The hub’s main task is to attract and implement IT investment projects. It registers only innovative companies, yet some of them were engaged in cryptocurrency mining,” said auditors from the audit committee.
The five mining farms identified in Q3 2021 illegally received 8.5 billion tenge (over $18.3 million) in tax preferences.
The audit committee attributed the situation to a legislative clash that did not restrict miners’ operations in tech parks.
Minister of Digital Development, Innovation and Aerospace Industry Bagdat Musin stated that suing miners who were posing as startups in Astana Hub would be very difficult.
“In Astana Hub, 574 participants are registered. Of them, five are engaged in mining. Meanwhile four companies say they provide data-centre services to process large volumes of information. In reality, if you go to court with them, you could break teeth, because they de jure processed information,” said Musin.
In turn, Deputy Minister of Digital Development Askar Zhambakin argued that due to a gap in the law, mining farms had the right to register in the hub, so it is not correct to speak of losses to the state.
“Any Astana Hub resident can receive tax preferences and other forms of support,” he added.
As a result of the audit, the government was advised to refine the legislation governing the IT technopark’s activities.
As noted earlier, after the mining ban in China, Kazakhstan became one of the main recipients of specialized equipment, which led to a rise in grey miners. Accordingly, from 1 January 2022 authorities introduced an additional fee of 1 tenge per kWh of electricity used for mining cryptocurrencies.
Additionally, the government proposed to cap the energy use by mining data centers in case of electricity shortages and create a registry of farms.
Cryptocurrency mining in Kazakhstan is not prohibited, though miners are obliged to inform authorities about their activities to continue operating without restrictions.
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