Crypto Miners in Kazakhstan Start Paying Higher Electricity Fees – Mining Bitcoin News

Since the beginning of 2023, cryptocurrency miners operating in Kazakhstan will have to pay new fees for the electricity they need to mint digital coins. A levy introduced in 2021 now depends on the price of electricity used by Bitcoin farms and can be much higher than the original levy.

The new year brings higher costs for companies mining crypto in Kazakhstan

From January 1st, an electricity fee for crypto miners in Kazakhstan will be charged on a progressive scale. The initial universal Surcharge of 1 Kazakh tenge ($0.002) per kilowatt hour ( kWh ), which was first adopted in summer 2021, can now reach 25 tenge (over $0.05).

The applicable tariff depends on the source and price of electrical energy used to extract digital currencies. The new mechanism for determining the tariff was introduced with a bill to amend the country's tax legislation, approved by President Kassym-Jomart Tokayev signed come into force in July 2022.

The basis for the levy is the average price of electricity consumed by a miner during a specific tax period. If a company pays 24 tenge or more per kWh, the minimum fee of 1 tenge will be charged according to the latest tariff table from Interfax Kazakhstan and other local media.

The lowest tariff is also offered to crypto farms that use renewable energy, without taking into account the cost of electricity. And for energy generated from other sources – the cheaper the electricity used, the heavier the tax burden. The fee can be up to 25 tenge per kWh, the reports detail.

Kazakhstan became a mining hotspot following China's crackdown on the industry in 2021, attracting crypto miners with its low, subsidized electricity prices. The influx of Mining company has been blamed for the country's growing electricity deficit.

Authorities in Nur-Sultan are investigating illegal mining operations and taking steps to more fully regulate the sector. A provision in a new bill assumed by Kazakhstan's parliament in December aims to require miners to buy excess electricity on a government-controlled market.

A previous proposed law, introduced by a group of lawmakers in October, limits mining to registered companies. It also allows non-resident companies to mine in the country as long as they have agreements with locally licensed data centers.

Do you think the new fees could convince some mining companies to leave Kazakhstan? Share your thoughts on this topic in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens' quote: "Being a writer is what I am, not what I do." In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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