The lower house of Kazakhstan’s parliament – Mazhilis – reportedly greenlighted new bills that aim to establish appropriate rules in the local crypto sector.
They will require miners to create authorized entities, register with the regulators, and continue being subject to taxation.
Solving the Problem With ‘Gray Miners’
Despite being a global leader in cryptocurrency mining, Kazakhstan has certain issues with the so-called “gray miners” who conduct their operations without the necessary licenses.
A recent coverage informed that the lower house of the parliament approved five new bills that could fix those problems.
Ekaterina Smyshlyaeva – a member of the Committee on Economic Reform and Regional Development – explained that the legislation will oblige crypto miners to receive authorization from the relevant financial regulators, create legal entities, and become “full-fledged subjects of taxation.”
“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,” she added.
The new framework, assuming it becomes official, will levy comprehensive taxes on the import of cryptocurrency mining equipment. It will also require miners to exchange up to 75% of their capital on local crypto platforms starting from 2024.
“By transferring all cryptocurrency transactions to Kazakhstani exchanges, we make them transparent. Crypto exchanges are subjects of financial monitoring and, according to the project, and will be integrated with the information systems of the State Revenue Committee.
The introduction of a registry of mining equipment will exclude the operation of illegal data centers and licensing will finally solve the problem of gray miners, will ensure the security and balance of the energy system.”
According to estimations, over a million residents of the Central Asian country deal with digital assets on international exchanges. The ruling body plans to bring them all to local trading venues.
Different Tax Rates for Kazakhstani Crypto Miners
Several months back, the President of Kazakhstan – Kassym-Jomart Tokayev – signed a bill requiring domestic cryptocurrency miners to pay higher tax rates than other consumers. The exact percentage depends on the average price of electricity used when mining digital assets.
The legislation has a green focus, as miners who utilize renewable energy are subject to the lowest tax rate.
It is worth noting that Kazakhstan has made a name in the digital asset space by being among the leading nations in terms of bitcoin mining. It accounts for 13.2% of the global hash rate, surpassed only by the USA (37.8%) and China (21.1%).
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