Kazakhstan Receives IDR 103 Billion Tax From Crypto Mining Entity In 2022

JAKARTA - The Kazakh government received a tax payment of 3.07 billion tenge or approximately (IDR 103 billion) from a crypto mining entity in 2022 after the implementation of an amended law regulating fiscal burdens in crypto mining, according to local media reports.

Initial data from the government for 2023 shows that mining costs collected until April 27 reached 240 million tenge or around (Rp7.9 billion) at the time of writing. These figures are much lower than the cost of 652 million tenge paid in the first quarter of 2022.

Kazakhstan is among the largest Bitcoin mining centers in the world. In January 2022, the Central Asian country accounted for 13.22% of the total Bitcoin hash rate, only behind the United States (37.84%) and China (21.11%), according to data from the Cambridge Center for Alternative Finance.

The country introduced a digital mining tax on January 1, 2022, based on electricity consumption by mining entities. The law comes into effect as national dissatisfaction increases with the use of national power grids by undertaxed crypto miners. The changes to the law are also considered legal means for further adoption amid increasingly stringent regulations around the world.

A number of foreign mining operators moved to Kazakhstan during the bullish market 2021, affecting the already difficult relationship between the country and miners. Some estimates suggest that more than 87,849 rigs have been brought to the region in November 2021 after China halted mining activities.

Recently, according to a Cointelegraph report, the government announced plans to introduce new crypto regulation to stem illegal tax fraud and business operations. One proposal asks for government approval for secure digital asset issuers, while others will require miners to sell at least 75% of cryptocurrencies obtained through listed exchanges. The move is expected to reduce tax evasion.