Minners in Kazakhstan pay high electricity tax

safar1980

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Quote from: joniboini on May 25, 2023, 08:09:14 PM

Quote from: safar1980 on May 25, 2023, 04:26:24 PM

And it is difficult for legal miners to work there due to constant checks and shutdowns.

Can you share some sources for this story? Some articles that I found online tend to describe the government cautiously trying to make sure more miners are registered instead of pushing them away, although they don't really have the pull to keep the miners stay in their country.

Some of these stories are quite old though, such as this one[1] or this one[2]. I found one article that describes how miners are fleeing from Kazakhstan but the release date is quite conflicting with one of the articles I shared below[3]. At the very least it is clear that their energy supply can't sustain mining activities and public needs in general, with faults attributed to dated technology, corruption, etc.

[1] https://fortune.com/2021/11/24/kazakhstan-bitcoin-crypto-mining-energy-power-crisis-china-xive-shuts-down/
[2] https://cointelegraph.com/news/kazakhstan-among-top-3-bitcoin-mining-destinations-after-us-and-china
[3] https://restofworld.org/2022/crypto-miners-fleeing-kazakhstan/

There is a lot of information about Kazakhstan in Russian, but it is better to ask the Kazakhs in miners' chats.

Read this article
Hunting for miners in Kazakhstan - why do mining companies continue to close all over the country?
https://emoney-hub.com/blog/novosti-o-kriptovalyutax/oxota-na-mainerov-v-kazaxstane-pocemu-po-vsei-strane-prodolzayut-zakryvatsya-mainingovye-kompanii

They all speak Russian and many still mine without paying taxes, because if you pay, they will either warn you about the check or it will not happen.

zasad@

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If you need real information about mining in Kazakhstan, then ask questions to this user. He lives in Kazakhstan and is mining in Kazakhstan and he has a lot of experience.
https://bitcointalksearch.org/topic/interview-crypto-business-in-kazakhstan-5313966
I talked a lot about the fact that articles about cryptocurrencies in Russia do not correspond to reality and the real situation is completely different. I will refrain from an opinion because I have not been to Kazakhstan.

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Quote from: safar1980 on May 25, 2023, 04:26:24 PM

And it is difficult for legal miners to work there due to constant checks and shutdowns.

Can you share some sources for this story? Some articles that I found online tend to describe the government cautiously trying to make sure more miners are registered instead of pushing them away, although they don't really have the pull to keep the miners stay in their country.

Some of these stories are quite old though, such as this one[1] or this one[2]. I found one article that describes how miners are fleeing from Kazakhstan but the release date is quite conflicting with one of the articles I shared below[3]. At the very least it is clear that their energy supply can't sustain mining activities and public needs in general, with faults attributed to dated technology, corruption, etc.

[1] https://fortune.com/2021/11/24/kazakhstan-bitcoin-crypto-mining-energy-power-crisis-china-xive-shuts-down/
[2] https://cointelegraph.com/news/kazakhstan-among-top-3-bitcoin-mining-destinations-after-us-and-china
[3] https://restofworld.org/2022/crypto-miners-fleeing-kazakhstan/

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Quote from: goldkingcoiner on May 25, 2023, 01:52:46 PM

Kazachstan has always had the cheapest electricity costs but this new fee is just another way for the corrupt politicians of Kazakhstan to steal money out of their citizens pockets. Its nothing new. You can ask any Kazakh he will say the same. The corruption and government thievery has been going on for ages.

The higher rate is definitely not the worst rate for a miner but we can expect it to have some effect on the future of mining in Kazakhstan, as well as on the price of Bitcoin.

They are shooting themselves in the foot instead of adopting the image of friendliest miner country. But thats just my own thoughts on the matter.

Lets see how things play out...

Kazakhstan is full of unregistered miners who are overloading the power grid.
A lot of unregistered equipment from China was imported into Kazakhstan.
And many unregistered miners have relatives of officials who help them work. And it is difficult for legal miners to work there due to constant checks and shutdowns.

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Quote from: Flexystar on May 25, 2023, 11:38:33 AM

I think we should ask the answers to those miners who are being generous enough to pay that much taxes on electricity (& electricity bills itself). How could they be beating such high energy costs and be one of the top country to have big mining farms. What is the source of those bills and their costing, they really do not make up the math neither they are profitable in straight couple of years mining.

Kazakhstan has cheap electricity, that is why there are many miners operating in the country. If miners were not making profit there, then a lot of them would have moved their farms to another place. If the government fixes a certain amount in taxes, you have to pay it or you relocate. Take note that miners make a lot of money, so this cheap tax fee isn't a problem for them.

Quote from: Accardo on May 06, 2023, 05:28:57 PM

How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

The fee miners pay in taxes, electricity, mining farms, maintenance, etc does not affect BTC transaction fees. What affects BTC transaction fees is the size of the transaction and the congestion of the network.

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Quote from: FP91G on May 24, 2023, 04:01:36 PM

Quote from: Youngkhngdiddy on May 24, 2023, 05:11:57 AM

Kazakhstan has a lot of electricity—the price is cheap,” Bekbauov says. Some miners were paying $0.0023 per kilowatt-hour for their power—far below what they'd expect to pay in the US or China. In 2018, they took their fledgling company, Xive, to Tbilisi for a mining conference.

Since the beginning of 2023, cryptocurrency miners operating in Kazakhstan are obliged to pay new fees for the power they need to mint digital coins. A surcharge introduced in 2021 now depends on the price of electricity consumed by bitcoin farms and can be much higher than the original levy

https://news.bitcoin.com/crypto-miners-in-kazakhstan-start-paying-higher-electricity-fees/
https://eurasianet.org/kazakhstan-slaps-crypto-miners-with-higher-energy-bills

The base for the levy is the average price of electricity consumed by a miner during a given tax period. If a company paid 24 tenge or more per kWh, the minimum fee of 1 tenge would be charged, as per the latest tariff scale quoted by Interfax Kazakhstan and other local media.

For example, if the producer pays 24 tenge, worth around $0.05, or more per kilowatt hour, the surcharge remains at 1 tenge. If they pay 5-10 tenge, the surcharge will hit 10 tenge.
https://news.bitcoin.com/crypto-miners-in-kazakhstan-start-paying-higher-electricity-fees/
https://eurasianet.org/kazakhstan-slaps-crypto-miners-with-higher-energy-bills
$0.05 per kilowatt is not the worst rate for a miner with taxes. In Russia, in many regions, the tariff for the population for electricity is 10-20% higher. If not compared with Irkutsk.

Kazachstan has always had the cheapest electricity costs but this new fee is just another way for the corrupt politicians of Kazakhstan to steal money out of their citizens pockets. Its nothing new. You can ask any Kazakh he will say the same. The corruption and government thievery has been going on for ages.

The higher rate is definitely not the worst rate for a miner but we can expect it to have some effect on the future of mining in Kazakhstan, as well as on the price of Bitcoin.

They are shooting themselves in the foot instead of adopting the image of friendliest miner country. But thats just my own thoughts on the matter.

Lets see how things play out...

Flexystar

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I think we should ask the answers to those miners who are being generous enough to pay that much taxes on electricity (& electricity bills itself). How could they be beating such high energy costs and be one of the top country to have big mining farms. What is the source of those bills and their costing, they really do not make up the math neither they are profitable in straight couple of years mining.

They must be holding their coins, putting more efforts on that front to profit?

The price hike is 5 times than the basic electricity so I am pretty sure it’s not worth it.

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Quote from: Youngkhngdiddy on May 24, 2023, 05:11:57 AM

Kazakhstan has a lot of electricity—the price is cheap,” Bekbauov says. Some miners were paying $0.0023 per kilowatt-hour for their power—far below what they'd expect to pay in the US or China. In 2018, they took their fledgling company, Xive, to Tbilisi for a mining conference.

Since the beginning of 2023, cryptocurrency miners operating in Kazakhstan are obliged to pay new fees for the power they need to mint digital coins. A surcharge introduced in 2021 now depends on the price of electricity consumed by bitcoin farms and can be much higher than the original levy

https://news.bitcoin.com/crypto-miners-in-kazakhstan-start-paying-higher-electricity-fees/
https://eurasianet.org/kazakhstan-slaps-crypto-miners-with-higher-energy-bills

The base for the levy is the average price of electricity consumed by a miner during a given tax period. If a company paid 24 tenge or more per kWh, the minimum fee of 1 tenge would be charged, as per the latest tariff scale quoted by Interfax Kazakhstan and other local media.

For example, if the producer pays 24 tenge, worth around $0.05, or more per kilowatt hour, the surcharge remains at 1 tenge. If they pay 5-10 tenge, the surcharge will hit 10 tenge.
https://news.bitcoin.com/crypto-miners-in-kazakhstan-start-paying-higher-electricity-fees/
https://eurasianet.org/kazakhstan-slaps-crypto-miners-with-higher-energy-bills
$0.05 per kilowatt is not the worst rate for a miner with taxes. In Russia, in many regions, the tariff for the population for electricity is 10-20% higher. If not compared with Irkutsk.

Youngkhngdiddy

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Kazakhstan has a lot of electricity—the price is cheap,” Bekbauov says. Some miners were paying $0.0023 per kilowatt-hour for their power—far below what they'd expect to pay in the US or China. In 2018, they took their fledgling company, Xive, to Tbilisi for a mining conference.

Since the beginning of 2023, cryptocurrency miners operating in Kazakhstan are obliged to pay new fees for the power they need to mint digital coins. A surcharge introduced in 2021 now depends on the price of electricity consumed by bitcoin farms and can be much higher than the original levy

https://news.bitcoin.com/crypto-miners-in-kazakhstan-start-paying-higher-electricity-fees/
https://eurasianet.org/kazakhstan-slaps-crypto-miners-with-higher-energy-bills

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Noted, the fees are quite affordable compared to the amount miners earn from fees, but the fact it got increased, after the government collected 7m dollars, should be questioned and looked into too, If miners pocket the fees showing the government that it's cheap to them, they'll likely increase it again until the fees become unfavorable. However, people in different regions or countries pay higher fees, yet the way governments operate, they're always on the look out for more money, in my view, I see in future that the fees will be increased again.

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Quote from: lionheart78 on May 08, 2023, 04:54:01 PM

require miners to sell at least 75% of crypto earned via registered exchanges

I think this one would have a huge impact on the miners since not all miners wanted to sell their mined BTC as soon as they mined it. Probably legislator need to discuss about this with the Bitcoin mining group and make a time frame on when they have to sell their mined BTC.

Yes, afterwards it will in theory be possible to buy back BTC sold after taxation, or from abroad if you have an associate which can do the process for you.

But it is sure that this would represent a small loss due to CEX fees and transactions fees.

For the moment this law is not yet in force, and it will not be the first time that a law announced will not be applied or really implemented. Let's wait and see.

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With the power tax charge of $0.01, miners are sitll getting much profit from it so there will be no complaint about the regulation. Although according to the article, in order to limit tax evasion, they (Kazakhstan legislators) wanted to implement a Bill where:

there is a need for government approval for secured digital assets issuers
require miners to sell at least 75% of crypto earned via registered exchanges

I think this one would have a huge impact on the miners since not all miners wanted to sell their mined BTC as soon as they mined it. Probably legislator need to discuss about this with the Bitcoin mining group and make a time frame on when they have to sell their mined BTC.

Quote from: stompix on May 08, 2023, 03:12:33 AM

Quote from: Accardo on May 06, 2023, 05:28:57 PM

As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners;

Hmm, at 13% of the hash rate and an average price of $30 000 miners in Kazakhstan made 1,281,150,000 in revenue while the government collected 7 million in taxes. And some wonder why every single government wants to tax miners more and more!!! 1.2 BILLION! in revenue and 7 mils in tax! Lol.

This is possibly because of tax evasion reason why the government is planning to propose a bill in order to minimize tax evasion

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The Maniers did not have such a big award for 6 years. $20 per transaction is very expensive. Bitcoin has no plans to scale the blockchain, and BRC-20 tokens can replicate the high rewards of miners, as it was on the Ethereum blockchain.

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Quote from: Accardo on May 06, 2023, 05:28:57 PM

As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners;

Hmm, at 13% of the hash rate and an average price of $30 000 miners in Kazakhstan made 1,281,150,000 in revenue while the government collected 7 million in taxes. And some wonder why every single government wants to tax miners more and more!!! 1.2 BILLION! in revenue and 7 mils in tax! Lol.

Quote from: philipma1957 on May 06, 2023, 05:34:55 PM

the miners should shut the fuck up and be happy to pay that.

With block fees going closer to the block reward it will take one week of hype to pay all the taxes for one year, it's really the worst moment to complain about a 1cent increase.

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Yeah there is nothing to complain about here in terms of price per kw/h and regarding of the taxes.

I have ASICs running in several countries where electricity is very cheap, including Kazakhstan.

In the Karaganda region, we pay 0,0089 usd per kw/h excluding taxes, so all taxes included we are at about 0,011 usd per kw/h.
Stop whining, this is an extremely attractive price and I haven't met anyone who finds it unfair or too expensive.

What my associate fears is the addition of a tax on mining profits. He is afraid that Russia's appetite for crypto mining in these times will force the Kazakh government to accept the introduction of a tax which would cause a fuite of hashrate to Russia (which has a huge influence on the country politically). But this is not done, and is only speculation.

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Quote from: Accardo on May 06, 2023, 05:28:57 PM

Kazakhstan is a well known bitcoin hub alongside countries like China and USA the country is a top ranked bitcoin mining country, they contributed to 13.22% of total bitcoin hash rate in January 2022. Same year, 2022, they passed a bill and made an increase on the electricity fee for bitcoin miners, which skyrocketed from $0.0023 per Kwh to $0.01. As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners; 1.5 million in the first quarter. Hence, the fee is low for miners that use renewable energy; green energy. But, that doesn't work well on bitcoin mining. How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

https://cointelegraph.com/news/kazakhstan-collected-7m-in-crypto-mining-taxes-in-2022

0.01$ kwh, even if you say that the price has increased, it can be said that it is still very cheap. And I also think that Bitcoin miners are very lucky honestly speaking if they only consume this amount of kwh.

Here in my country it is at 0.2$kwh just think about the difference of 0.01$ kwh is very far. Maybe it's not in the sane mind if anyone complains about that, because the 0.0023$ is almost like you don't pay for electricity and if there is a payment now because it became 0.01$ kwh, it still doesn't feel that way. expensive for my opinion.

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Quote from: Accardo on May 06, 2023, 05:28:57 PM

Kazakhstan is a well known bitcoin hub alongside countries like China and USA the country is a top ranked bitcoin mining country, they contributed to 13.22% of total bitcoin hash rate in January 2022. Same year, 2022, they passed a bill and made an increase on the electricity fee for bitcoin miners, which skyrocketed from $0.0023 per Kwh to $0.01. As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners; 1.5 million in the first quarter. Hence, the fee is low for miners that use renewable energy; green energy. But, that doesn't work well on bitcoin mining. How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

https://cointelegraph.com/news/kazakhstan-collected-7m-in-crypto-mining-taxes-in-2022

$0.0023 is almost free electricity. $0.01 is a x5 increase but still very cheap. They should be good, I guess will just have to upgrade some ancient hardware to something more or less modern and that's it.

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Quote from: Accardo on May 06, 2023, 05:28:57 PM

Kazakhstan is a well known bitcoin hub alongside countries like China and USA the country is a top ranked bitcoin mining country, they contributed to 13.22% of total bitcoin hash rate in January 2022. Same year, 2022, they passed a bill and made an increase on the electricity fee for bitcoin miners, which skyrocketed from $0.0023 per Kwh to $0.01. As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners; 1.5 million in the first quarter. Hence, the fee is low for miners that use renewable energy; green energy. But, that doesn't work well on bitcoin mining. How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

https://cointelegraph.com/news/kazakhstan-collected-7m-in-crypto-mining-taxes-in-2022

I don't consider that tax high enough because if we compare it to the taxes that other countries have then still the tax is far lower than others. If they have generated 7 million dollars from the fee then it's their right as they have allowed miners to earn way more than that with low cost electricity they are providing.

The best thing about that country is that they aren't putting higher taxes on the ones who are willing to use renewable energy sources for the mining operations. I think they are trying to direct miners towards green energy and that's why they have increased the initial taxes on the mining operations.

A miner is still lucky enough to have mining operations in that country because they can still generate enough revenue through mining of Bitcoin in that region. I think that's enough for someone to settle their if their main goal is to run a hue mining farm. Because with such low electricity rates a miner can earn a lot from mining.

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OP, how do you come up with the current power costs in that country? Or perhaps you are on ground?

I am really envious of the stated power rate, even with the tax levied on it. Some of us have been to places where mining just doesn't make sense at all because of high electricity costs.
Speaking of levying taxes on electricity used for mining Bitcoin, it's one of the most stupid taxes I have come across.

Shouldn't they be taxing electricity used for playing video games or electric cookers as well? Since most of these Governments are bitching about Bitcoin mining contributing "posing environmental threats" but so does any other form of electricity/non-renewable energy usage.

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Quote from: philipma1957 on May 06, 2023, 05:34:55 PM

USD 0.01 PER want is cheap

not sure what the complaint is.

✌️ Oh yeah not as if the miners are not making profits with that cheap electricity in Kazakhstan and after the country's last miners' regulations and cryptocurrency policy, I was expecting to hear good news coming from that region is one of the most cryptocurrency POW friendly countries.

Crypto miners are generating a lot of revenue from fees that should be enough to cover their operational costs, and if their feel they are being overly taxed it ok to opt into other alternatives source of electricity generation to catch down the cost of energy consumption and bills.

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Quote from: Accardo on May 06, 2023, 05:28:57 PM

Kazakhstan is a well known bitcoin hub alongside countries like China and USA the country is a top ranked bitcoin mining country, they contributed to 13.22% of total bitcoin hash rate in January 2022. Same year, 2022, they passed a bill and made an increase on the electricity fee for bitcoin miners, which skyrocketed from $0.0023 per Kwh to $0.01. As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners; 1.5 million in the first quarter. Hence, the fee is low for miners that use renewable energy; green energy. But, that doesn't work well on bitcoin mining. How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

https://cointelegraph.com/news/kazakhstan-collected-7m-in-crypto-mining-taxes-in-2022

$0.01 USD PER kwatt is cheap

not sure what the complaint is.

I read you link and I can't find the power cost per kwatt.

only the tax on the power per kwatt.

so if the power cost was 0.02 + 0.0023 = 0.0223

and is now 0.02 + 0.01 = 0.030

the miners should shut the fuck up and be happy to pay that.

But the actual numbers are not in the article

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Kazakhstan is a well known bitcoin hub alongside countries like China and USA the country is a top ranked bitcoin mining country, they contributed to 13.22% of total bitcoin hash rate in January 2022. Same year, 2022, they passed a bill and made an increase on the electricity fee for bitcoin miners, which skyrocketed from $0.0023 per Kwh to $0.01. As of 2022 the country Kazakhstan generated 7 million dollars from bitcoin miners; 1.5 million in the first quarter. Hence, the fee is low for miners that use renewable energy; green energy. But, that doesn't work well on bitcoin mining. How can bitcoin miners settle the high rate of electricity bills channeled to them? Is it affecting bitcoin transaction fee?

https://cointelegraph.com/news/kazakhstan-collected-7m-in-crypto-mining-taxes-in-2022

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