Kyrgyzstan’s parliament is considering the possibility of creating a tax system for crypto miners in the country. If this happens, it will be the first time the government is regulating their activities.
Lawmakers in Kyrgyz want to start taxing miners in a bid to regulate their activities.
For this reason, the bill, “Amending the Tax Code of the Kyrgyz Republic” was proposed. Apart from giving the crypto community a chance to thrive, this will be a good means of adding to the government’s revenue.
If this scales through, it will be a thing of joy to the crypto community and they will no longer be in the hide-outs. Kyrgyz in 2014 banned all activities related to cryptocurrencies including using it as a mode of payment.
Time to tax
The law, if passed, will demand a tax rate of 15% from the profits of mined crypto. The first proposal was in August last year and it is expected that this will add about $4.2 million to the government’s revenue.
The parliament also intends to harmonize the cost of electricity for all miners. Based on the suggestion from the Supreme Council, miners will be paying about 70% more than others if $0.05 per KWh is upheld for them instead of $0.03 which others pay for the same unit.
Deliberation at the Kyrgyzstan parliament
It appears that not every member of the parliament is in support of the decision to allow miners the liberty to do their activity.
Aaly Karashev of the parliament raised concerns that this will affect electricity consumption in the country since their rate of electricity importation is two times the rate of exportation.
Even though Natalia Nikitenko of the parliament agrees with Aaly, he doesn’t think this will have any serious effect because mining has been going on illegally despite its ban in September 2019.
Kyrgyz stopped selling electricity to 45 mining companies in September because it was insufficient for the local users. The companies consumed more than what some communities within the country would use within the same period of time.