A new bill underway in Kazakhstan’s parliament requires Kazakhstan’s cryptocurrency miners to convert up to three-quarters of their income on locally registered exchanges. Lawmakers also want to ensure cryptocurrency companies pay taxes and fees.
Kazakhstan parliament votes on bill to regulate the activities of cryptocurrency miners and exchanges
A bill designed to create a regulatory framework for both the production and distribution of digital assets in Kazakhstan has been approved at first reading in Mazhilis. The bill and other supporting documents were recently submitted to the House of Representatives at the request of the country’s President, Kassim Jomart Tokayev.
One of the main purposes of this law is to establish rules for the operation of new types of financial institutions in Kazakhstan. Licensed cryptocurrency exchange. To support these trading platforms, the government plans to require cryptocurrency miners to exchange up to 75% of their income from 2024.
The authorities also require mining pools to pay taxes on profits and exchanges to pay fees. The authors of the bill intend to impose a corporate tax on cryptocurrency companies as well. Currently, mining companies are only required to pay taxes on the electricity they use, at a rate dependent on the amount and price of energy consumed to create digital coins.
When China cracked down on business in 2021, Kazakhstan attracted many mining companies with subsidized electricity tariffs. Central Asian countries impose levy and import Power from neighboring Russia.
As Ekaterina Smyshlyaeva, Member of the Economic Reform and Regional Development Committee of Majlis, points out, introducing a legal mechanism to control the use of electricity in the sector is another major issue for the proponents of the bill. Motivation. She also said the Department of Energy determines energy allocations for mining in order to keep the country’s energy supply system in balance.
The deputy, quoted by Russian news outlet RBC Crypto, expressed the opinion that Kazakhstan is being used as a “raw material accessory for the blockchain industry.” However, that will change as the new licensing regime for cryptocurrency miners replaces the current voluntary registration. This means that anyone who wants to mine must form a corporation and be taxed.
“The bill will combine the production and distribution of digital assets in one ecosystem. At the same time, the activities of miners and mining pools will be regulated and licensed by the Ministry of Digital Development, Innovation and Aerospace Industry. ” further explained Ekaterina Smyshlyaeva.
Do you think mining companies will move away from Kazakhstan due to the upcoming tighter regulations and increasing tax burden? Share your expectations about the future of mining in the country in the comments section below.
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