Kazakhstan proposes power price hikes and taxes targeting crypto miners

[JohnBitCo]

After the bitcoin mining ban in China, many miners moved to Kazakhstan and mining in USA increased also, USA beome the country with the highest bitcoin mining hashrates, Kazakhstan following USA become the second country with the second highest mining hashrates. The Kazakh government has proposed taxes that can discouraged mining in Kazakhstan

On Feb. 4, Kazakhstan’s First Vice Minister of Finance, Marat Sultangaziyev, proposed a price increase from $0.0023 per Kwh to $0.01 (around a 335% increase) specifically for crypto miners.

He also proposed a tax on each individual graphics card (GPU) and each piece of equipment needed for crypto mining. He likened the tax-per-video card to the way casinos are taxed for each table they run, whether or not the table is active.

The third part of his proposal was to remove mining hardware from an exemption on value-added tax (VAT).

What can this caused to miners in Kazakhstan, it is like some miners will have no option but to shutdown if this crypto mining taxes become effective. It is possible some miners will be able to still make profit because they are established miners already but what about new miners, this can cause new miners not to be able to make any profit and shutdown, therefore discouraging people to join crypto mining business in the country.

As per the article from coin telegraph, it states that Kazakhstan proposed the increase in electricity rates Kazakhstan specifically for the miners, so it means that the electricity used for households or in the industrial sector (not for mining) will still be available at low rates?
If this is so, then how anyone can distinguish that the electricity used is for the mining purpose or some other usage?

[_act_]

Considering the fact that the bitcoin mining in China wasn't that big and wasn't using that much electricity and the amount they were using were coming from clean renewable sources that wouldn't have existed otherwise and also comparing it to the entire population of the country with 1.4 billion, this reason doesn't seem to be the right motivation behind the crackdown.
In fact I believe it was a move to push people into using their centralized govcoin that they plan on creating (digital Yuan or something like that).

If to look for one of the most centralized government in the world that loves nothing about anything that is not from their country, then it is China, China has the technology and power to make bitcoin mining possible, everything can run smoothly, and not that miners will not pay for the electricity but just that China can never be happy about what is not from their country that they can not control unlike Yuan and their digital Yuan.

As per the article from coin telegraph, it states that Kazakhstan proposed the increase in electricity rates Kazakhstan specifically for the miners, so it means that the electricity used for households or in the industrial sector (not for mining) will still be available at low rates?
If this is so, then how anyone can distinguish that the electricity used is for the mining purpose or some other usage?

It is about miners in Kazakhstan, other business organizations and households are not affected by this for now.

[kryptqnick]

I don't understand why countries can't just own it when they're lucky to have many miners, and provide a reasonable regulatory framework for them. In my country, the electricity cost depends highly on how much electricity is being used (it's one sum per Kwh if the totall is up to 100, another if it's up to something bigger, and so on), and it's a pretty fair system because it doesn't target any activity specifically but focuses on what matters: consumption of electricity.
As for the idea of taxing GPUs, I see a big problem here: how can they know if the GPU's bought for mining or for a custom PC? This could lead to prices going even higher than they already are, in this crazy period of shortages. As for taxes, why not simply tax miners with income tax, just like any other income would be taxed? They can declare monthly income and pay a certain percentage of it in taxes. As for removing the VAT exemption, that seems reasonable to me because I don't see why it's exempt in the first place. In any case, it's just a proposal by one important person; it doesn't mean it'll actually be adopted.

[Bloodseekers]

I don't understand why countries can't just own it when they're lucky to have many miners, and provide a reasonable regulatory framework for them. In my country, the electricity cost depends highly on how much electricity is being used (it's one sum per Kwh if the totall is up to 100, another if it's up to something bigger, and so on), and it's a pretty fair system because it doesn't target any activity specifically but focuses on what matters: consumption of electricity.
As for the idea of taxing GPUs, I see a big problem here: how can they know if the GPU's bought for mining or for a custom PC? This could lead to prices going even higher than they already are, in this crazy period of shortages. As for taxes, why not simply tax miners with income tax, just like any other income would be taxed? They can declare monthly income and pay a certain percentage of it in taxes. As for removing the VAT exemption, that seems reasonable to me because I don't see why it's exempt in the first place. In any case, it's just a proposal by one important person; it doesn't mean it'll actually be adopted.

I think you are wrong in saying that everyone is entitled to the same electricity rate. Of course, in terms of determining electricity rates, they must be different for the sake of mutual justice and the welfare of the country. In terms of determining electricity rates, we must distinguish which class is for industrial customers, of course, it is different from home customers. and I think bitcoin mining falls into the category of industrial customers.

[Kakmakr]

" He also proposed a tax on each individual graphics card (GPU) and each piece of equipment needed for crypto mining. He likened the tax-per-video card to the way casinos are taxed for each table they run, whether or not the table is active. "

1. He is going to piss off all gamers and computer retailers in his country.. that has nothing to do with Crypto mining when they buy/sell GPU's.

2. Crypto miners will go underground in basements or in roof tops like they did with Marijuana farming.

3. Some Crypto miners will simply relocate to Crypto mining friendly countries. 

So guess who is going to lose with a stupid decision like this..... the government that implemented this. (Taxes pay their salaries) 

[AakZaki]

I believe this is not for the miners but they just actually looking for some way to increase their profit due to the lots of what going on out there. Their country is not doing well and they are about to fix their financial problems by fixing the rates of everything. Looks like the price hikes on the electricity bill are more on to take place this year because they won't hesitate to implement it while they still have the chance right now.

The reason why they are manipulating the tax for bitcoin miners may be because to increase the profits or income of kazakhstan. this is a good opportunity and they should really take advantage of it to take full advantage. Kazakhstan knows that bitcoin is a digital asset that costs a lot and mining bitcoins also benefits a lot. But at least the electricity tax target charged to crypto miners should still be on the threshold and not extort miners too much. Those miners will also move if the tax is deemed too expensive.