Correction: This article originally referred to Kazakhstan, instead of Kyrgyzstan. We apologize for the error.
Kyrgyzstan has proposed a 15% tax on cryptocurrency mining that will legalize the practice. The report was first published on the government’s website on June 3, 2020.
The groundwork for legalization of crypto mining has been in place for some time. On January 17, 2018, the Head of Kyrgyzstan’s National Bank, Tolkunbek Abdygulov, said the Bank would not stand in the way of the country’s citizens seeking to invest in crypto assets at their own risk. Given the fundamental importance of crypto mining to the success of any cryptocurrency, this tax proposal has major implications for the crypto industry in Kyrygyzstan.
However, debate has persisted on the merit of crypto investments in the country. A report, co-authored by the Kyrgyz Stock Exchange and the International Financial Center Development Agency on April 3 2018 says that non-professional investment of savings into crypto-assets carries an unacceptable risk.”
The bill defines a virtual asset as a digital expression of value, and determines the tax rate to be calculated from the cost of electricity consumed for mining, including VAT and sales tax.
It is also expected that the tax rate applied to crypto mining will help to increase government budget revenue.
Normally Bitcoin miners have to worry about the fine details of electricity prices, now it might be a whopping great tax.