After Kazakhstan’s lawmakers have passed new crypto regulations governing bitcoin mining signing them into law, embarking at the same time on taxing these mining firms, Kazakhstan is no longer the safe haven it once was.
Solely focused on the crypto mining aspect of the crypto sector, the bill titled ‘On Digital Assets of the Republic of Kazakhstan’ made Kazakhstan the latest country to sign a new cryptocurrency regulation regarding crypto mining.
The lower hours of the Parliament of Kazakhstan, the Mäjilis, has approved four bills concerning crypto mining that introduce a new scheme of electricity purchasing for mining equipment, updated licensing as well as taxation schemes for industries.
Due to its low electricity costs and leniency toward cryptocurrencies, Kazakhstan emerged as the next safe haven following the Chinese miners’ exodus but as crypto mining boomed and more mining corporations relocated to the country, Kazakh lawmakers started taking drastic measures to prevent abuse since it could have disastrous consequences for Kazakhstan and its economy.
The strict regulations imposed on this industry envisage, for a start, fees for electricity usage and limited buying of electricity from the public grid where miners will be required to only purchase surplus electricity to conduct their mining operations.
Though they’ll also be allowed to buy electricity from Kazakhstan’s Electricity and Power Market Operator (KOREM) but since the electricity would be granted to the highest bidder in an auction-style distribution method, not everyone would have access to it.
With regard to the license that mining firms must receive to conduct their operations, it is now categorized into two – one for digital miners who have no energy quota and still lease cells in data processing centers, and another for companies that already have the necessary infrastructure in place: data processing centers with equipment and security.
The updated taxation scheme outlined in the bill will see new reforms, including in the area of mining pool capitalism, Value Added Taxes (VAT), as well as few other adjustments, including corporate income tax for both corporate and single mining industries based on the value of the digital assets and the mining pool rates.
Crypto exchanges will also be subject to income taxation.
