Kazakhstan backs new tax rates for miners in first reading

Kazakhstan’s Majilis deputies (the lower house of parliament) backed in a first reading a bill to amend the Tax Code affecting mining taxation.

Changes propose differentiated tax rates for mining activity. According to Economy Minister Alibek Kuantyrov, the measure aims to level the load and discourage self-consumption of electricity.

“The lower the cost of electricity, the higher the levy,” he explained.

According to the document (ForkLog has it), the rate is determined based on the average price of electricity during the reporting period:

• for cost 5-10 tenge per 1 kWh the tax rate will be 10 tenge;
• 10-15 tenge per 1 kWh — rate 7 tenge;
• 15-20 tenge per 1 kWh — rate 5 tenge;
• 20-25 tenge per 1 kWh — rate 3 tenge;
• 25 tenge and above per 1 kWh — rate 1 tenge.

For using renewable energy sources, regardless of electricity cost, the miners’ tax rate will be 1 tenge per 1 kWh.

Vice President of the Association of Blockchain and Data Center Industry of Kazakhstan, Sergey Putra, told ForkLog that deputies approved the bill only in the first reading and the document may still change.

Putra also noted that miners have not yet had electricity supplies restored — restrictions have been in place since the start of the year.

As of January 1, 2022 in Kazakhstan introduced an additional levy of 1 tenge per kWh of electricity consumed in mining.

In February, President Kassym-Jomart Tokayev ordered to raise the mining tax. The Ministry of Economy proposed to raise the rate tenfold, and floated plans to tie miners’ tax to the price of cryptocurrencies.

Against the backdrop of higher taxes and power-supply restrictions, many mining operators have begun leaving Kazakhstan. Read more in ForkLog’s exclusive:

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