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FIX: An earlier version of this post quoted the Russian news service Crypto.pro, reporting on Kazakhstan. For some reason, Russian news organizations mistook Kazakhstan for Kyrgyzstan. It is the latter country, not the former, that has proposed legislation that would see a 15% tax imposed on bitcoin mining companies. This is part of efforts to raise funds to help fight the coronavirus pandemic.
Proposed by the country’s Ministry of Economy, the new tax plan requires bitcoin (BTC) miners to first submit an application for registration to the authorities. The bill “determines the tax rate to be calculated from the cost of electricity consumed for the extraction, including VAT and sales tax”.
Thereafter, the taxpayer must then disclose the 15% tax on annual tax calculations. According to reports, “the registration clause makes the invoice unique … the taxpayer who works with cryptocurrencies stands out from the beginning of the tax return.”
The funds raised by the tax project will be channeled towards the construction of the infrastructure necessary to fight Covid-19, also giving a boost to the economy.
Miners are typically drawn to Kyrgyzstan’s cheap electricity, which averages $ 0.037 cents per kilowatt hour.
In neighboring Kazakhstan, Minister of Digital Development, Innovation and Aerospace Industry, Askar Zhumagaliyev, revealed in June that 14 bitcoin mining companies operated in the north of the country.
Over the next three years, the country is targeting investments of up to $ 738 million from cryptocurrency-related businesses, especially mining, he said.
The Kazakh government is also planning to introduce legislation to regulate the cryptocurrency sector. The new laws are expected to set new electricity tariffs for the cryptocurrency mining industry.
What do you think of Kyrgyzstan’s planned cryptocurrency mining tax and the opening of Kazakhs to crypto activities? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
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