Kazakhstan proposes 15% tax on block reward mining

Kazakhstan has proposed a 15% flat-rate tax on block reward mining, a report by a local outlet has revealed. With the coronavirus pandemic weighing heavily on the government’s hand, the tax will assist the government in its recovery efforts.

Kazakhstan boasts of contributing 6% of the global BTC hash rate, second only to China, according to a report by Russian outlet Crypto.pro. This is due to the enabling environment for the miners, including lax regulations for the digital currency industry and low electricity tariffs.

The new tax plan was proposed by the country’s Ministry of Economy. It will require any block reward miner to first file an application for registration with the authorities. After registration, he must include the 15% tax in his annual tax calculations.

The report further claims that the Kazakhstani government intends on amending the laws governing the digital currency industry in the near future. Some of the expected changes will be in regards to the electricity tariffs, with the government expected to revise the rates upwards to raise more money from the rapidly growing industry.

The funds raised from the digital currency taxes will be channeled towards the government’s efforts in fighting the coronavirus pandemic. Kazakhstan has been heavily impacted, with infections standing at 97,000. Over 1,000 people have succumbed to the virus.

The Central Asian country has sought to fully exploit the opportunities that the digital currency industry offers. Two months ago, the Minister of Digital Development and Innovation revealed that Kazakhstan was targeting $738 million in block reward mining investment. The Minister said that the country had 14 mining firms at the time which together had attracted over $200 million in investment.

The country has also been exploring a central bank digital currency as it seeks to fight corruption and digitize payments. Several high-ranking government officials have called on the Bank of Kazakhstan to develop the CBDC, with some reports indicating that the regulator is already working on demonstrating the feasibility of the digital currency.