Kyrgyzstan Sees Surge in Crypto Mining Tax Revenue; Stands at $900K

Share IT

Key Takeaways

  • The country collected around  $900,000 in taxes from crypto miners in the first 11 months of 2023.
  • Tax revenue from crypto mining during the same period in 2022 amounted to $133,200

In the first 11 months of 2023, the government of Kyrgyzstan witnessed a substantial increase in tax collections from crypto miners, totaling 78.6 million soms ( $900,000). 

The collected revenue , ranged from 738,000 soms ($8,284) in February to a peak of 11.6 million soms ($130,212) in August, with November reporting stable receipts at 7.6 million soms ($85,767).

Comparatively, tax revenue from crypto mining during the same period in 2022 amounted to 11.1 million soms ($133,200), with a tax rate of 10% applied to the cost of electricity, including value-added and sales taxes. The data suggests a notable surge in crypto mining activity in Kyrgyzstan, particularly in the second quarter when mining-related tax payments began to grow actively.

The country has seen a rise in crypto mining farms, often affiliated with owners of small hydroelectric power stations. President Sadyr Japarov’s approval of a crypto mining facility at the Kambar-Ata-2 Hydro Power Plant in July 2023 highlights the government’s interest in this sector.

 Notably, crypto miners in Kyrgyzstan are subject to a rate five times higher than the general public. Energy Minister Taalaibek Ibraev revealed that the majority of crypto mining farms in Kyrgyzstan have affiliations with small hydroelectric power station owners.

Despite this growth, the crypto mining industry in Kyrgyzstan faced challenges in 2023 due to low dam fill levels and delivery limitations stemming from contracts with neighboring countries. Miners had to import power, and the government encountered similar difficulties. Nevertheless, the crypto mining industry in Kyrgyzstan consumed 17 million KWh of electricity by the beginning of October 2023.

The development comes amid crypto mining as an activity being a subject of heavy scrutiny with sustainability advocates, government officials, and business leaders expressing concerns about its intensive energy requirements, greenhouse gas emissions, and substantial hardware needs.

Share IT
Saniya Raahath
Saniya Raahath

Get Daily Updates

Crypto News, NFTs and Market Updates

Can’t find what you’re looking for? Type below and hit enter!