Kazakhstan has proposed legislation that would see a 15% tax imposed on bitcoin mining firms. This is part of efforts to raise money to help with the fight against the coronavirus pandemic.
Proposed by the country’s Ministry of Economy, the new tax plan requires bitcoin (BTC) miners to first file an application for registration with the authorities, according to a recent report by a local Russian publication.
After this, the taxpayer must then indicate the 15% tax on their annual tax calculations. The report notes that “the clause on registration makes the bill unique… the taxpayer working with cryptocurrencies stands apart from the very beginning of filing a tax return.”
Funds raised from the draft tax will be channeled toward building the infrastructure that is needed to combat Covid-19 while also giving the economy a boost. The disease has so far killed nearly 1,300 Kazakhs, with more than 100,000 infected, official data shows.
Kazakhstan, a former Soviet state in central Asia, accounts for about 8% of the global bitcoin hashrate total, says crypto research company Bitooda. Together with Iran and Russia, the country boasts the world’s third-largest BTC mining industry.
Miners are typically drawn to Kazakhstan’s cheap electricity, which averages 3 cents per kilowatt-hour.
In June, the Kazakh Minister of Digital Development, Innovation and Aerospace Industry, Askar Zhumagaliyev, revealed that a total of 14 bitcoin mining companies were operating in the country’s north.
Over the next three years, the country is targeting up to $738 million of investment from crypto-related activities, particularly mining and convert BTC to ETH, he said.
According to the Russian publication, the Kazakh government is also planning to introduce legislation to regulate the cryptocurrency industry. The new laws are expected to set new electricity tariffs for the crypto mining sector.