Over a span of six months, the association engaged with government agencies and parliament to address taxation concerns for local miners. The outcome of these discussions led to the signing of a law by President Kassym-Jomart Tokayev on December 12, introducing amendments and additions to the tax legislation.
Previously, miners were required to pay a variable rate of 26 tenge for every 1 kWh of electricity consumed, which depended on the cost of electricity. However, starting from January 1, 2024, the payment will be fixed at 2 tenge per 1 kWh. Miners who utilized their own power generating capacity used to pay 10 tenge per 1 kWh, but this amount will now be reduced to 1 tenge.
Additionally, cryptocurrency exchanges registered in Kazakhstan will no longer have to pay value-added tax (VAT) on transactions involving digital assets. The removal of VAT for crypto exchanges in the country is expected to enhance their competitiveness in the global market, according to Dauren Karashev, the head of the Blockchain Technologies Association of Kazakhstan.
“The Association will continue striving to enhance transparency within the crypto industry in Kazakhstan. We are continuously monitoring the current legal framework to identify and revise any hindrances to industry growth in the country,” stated Dauren Karashev.
Media reports indicate that the Kazakhstani government collected around 3.07 billion tenge (approximately $7 million) in taxes from miners in 2022. Local mining companies had previously reached out to the President of Kazakhstan in October, urging for a reduction in their tax burden. The companies feared that without intervention, mining operations in Kazakhstan would cease to be viable.