Kazakhstan estimates annual budget receipts from legal miners

Cryptocurrency mining could bring more than $300 million in potential tax revenues to Kazakhstan’s budget. This was stated in a ForkLog interview by Alan Dordzhiev, head of the National Association of Blockchain and Datacenter Industry.

The association includes major Kazakh companies, accounting for about 70% of the country’s industrial mining market. According to оценкам of the Association, at present these legal players in the mining market bring no less than 98 billion tenge ($230 million) to Kazakhstan’s economy per year.

Meanwhile the KEGOC management company collects annually from miners 13 billion tenge ($30.4 million) for transporting electricity across its networks and for services «Расчетно-финансового центра по поддержке ВИЭ».

“If we also take into account the ‘grey’ miners, this figure can be safely doubled. According to available data, we are talking about another 500 MW of electricity consumed off the books,” Dordzhiev said.

According to experts’ forecasts, legal mining in the next five years will bring the economy more than $1.5 billion. Potential taxes will exceed $300 million.

With the opening of crypto exchanges and the introduction of a transaction tax, budget receipts over five years will reach $400 million.

“Only from the ‘white’ market players do data-centres receive about $310 million a year, $200 million of which goes to buying electricity from the state,” noted Alan Dordzhiev.

Members of the Association have already prepared a set of proposals to mitigate a potential electricity shortage in Kazakhstan.

“There are many proposals and not all of them can be commented on right now. One thing is known: in the near future the ‘grey’ mining will be possible to disconnect. To those who want to mine covertly at home or at industrial facilities, I would advise not to invest money there, as this will now be a very risky investment,” Dordzhiev told ForkLog.

According to the organisation’s calculations, alternative measures to combat a deficit would reduce electricity consumption for mining by more than 35% nationwide.

“Market restrictions on the volume of electricity consumed by crypto mining will negate years of efforts to attract foreign investors and will affect the actual inflow of money into Kazakhstan’s economy,” Dordzhiev concluded.

Earlier, in the Ministry of Energy of Kazakhstan assessed the volume of electricity consumption by mining centers.

As reported, according to the Cambridge Centre for Alternative Finance, after the ban on mining cryptocurrencies in China, Kazakhstan became one of the leaders in the volume of computing power in the Bitcoin network.

In June, President Kassym-Jomart Tokayev signed a law introducing an additional mining fee.

In September authorities proposed to limit the volumes of electricity consumption by mining data-centres in the event of a potential electricity shortage, as well as to create a registry of farms and raise electricity tariffs for cryptocurrency mining.

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