Crypto Miners In Kazakhstan Protest, Asking For Taxes On Mining Results To Be Revised

Bitcoin mining company in Kazakhstan is constrained by taxes. (Photo; Doc. Investment Monitor)

JAKARTA - The crypto mining industry in Kazakhstan is currently facing serious challenges due to high production costs. Miners complain that the government has restricted their access to subsidized electricity and implemented a progressive scale for additional costs they have to pay for the electricity they use.

Eight leading crypto mining companies in Kazakhstan have sent an open letter to President Kassym-Jomart Tokayev, requesting a revision of existing tax regulations. They also reminded authorities that the crypto mining sector in Kazakhstan is currently facing a very difficult situation, with many companies having suspended operations and planning to leave the country completely by the end of the year.

The miners stressed that they operate according to permission from the government, have a legal electric connection, and comply with all requirements of computing equipment. They have also collaborated with the government to regulate the industry, but consider that an ineffective and unbalanced tax policy has hampered such positive developments.

The biggest difficulty facing miners is the varying additional electricity costs, which can reach more than US$0.05 (Rp776) per kilowatt hour (kWh) depending on the basic price. This resulted in electricity costs accounting for up to 80% of the value of the digital assets they mine.

Kazakhstan has been the main goal for global crypto miners after the crackdown the Chinese government has taken on the industry two years ago. However, with increasingly strict electrical restrictions and undereffective regulations, a number of mining companies are starting to leave the country.

The shower, one of the mining giants from China, even announced a temporary suspension of most of its operations in Kazakhstan in July. The difficulty facing the crypto mining industry in Kazakhstan is a reflection of the rapid changes in the crypto world that affect the global economy.