CORRECTION: An earlier version of this post quoted the russian news service Crypto.pro, reporting on Kazakhstan. For some reason the Russian news outlets mistook Kazakhstan for Kyrgyzstan. It’s the latter country, not the former, that has proposed legislation that would see a 15% tax imposed on bitcoin mining firms. This is part of efforts to raise money to help with the fight against the coronavirus pandemic.
Proposed by the country’s Ministry of Economics, the new tax plan requires bitcoin (BTC) miners to first file an application for registration with the authorities. The bill “determines the tax rate to be calculated from the cost of electricity consumed for mining, including VAT and sales tax.”
After this, the taxpayer must then indicate the 15% tax on their annual tax calculations. According to reports, “the clause on registration makes the bill unique… the taxpayer working with cryptocurrencies stands apart from the very beginning of filing a tax return.”
Funds raised from the draft tax will be channeled toward building the infrastructure that is needed to combat Covid-19 while also giving the economy a boost.
Miners are typically drawn to Kyrgyzstan cheap electricity, which averages $0.037 cents per kilowatt-hour.
In neighbouring Kazakhstan, the Minister of Digital Development, Innovation and Aerospace Industry, Askar Zhumagaliyev, revealed in June that a total of 14 bitcoin mining companies were operating in the country’s north.
Over the next three years, the country is targeting up to $738 million of investment from crypto-related activities, particularly mining, he said.
The Kazakh government is also planning to introduce legislation to regulate the cryptocurrency industry. The new laws are expected to set new electricity tariffs for the crypto mining sector.
What do you think about Kyrgyzstan’s planned crypto mining tax, and Kazakhstans opening up to crypto activites? Let us know in the comments section below.
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