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Kyrgyzstan is about to legalize cryptocurrency mining

June 5, 2020

Legislature in the Kyrgyz Republic is considering tax legislation and regulating cryptocurrency mining.

The invoice, amending the Tax Code of the Kyrgyz Republictries to increase government revenue by imposing tax obligations on minerss, in addition to defining clear definitions for the terms “virtual assets” and “mining” in the context of cryptocurrencies.

If approved, The new tax system would be the first important step towards exempting the use of cryptocurrencies by the Kyrgyz Republic. The country explicitly prohibited the use of crypto assets as a means of payment.

Tax times

Kyrgyzstan is about to legalize cryptocurrency miningKyrgyzstan is about to legalize cryptocurrency mining

The new law would impose taxes on miners equal to 15% of the profits from the sale of the mined crypto assets. said bill was first proposed in August 2019, and It is estimated that an additional $ 4.2 million could be raised for the Kyrgyz Republic’s annual budget of approximately $ 1 billion.

Parliament also discussed the introduction a specially designed electricity fee for minerson the proposal of the Supreme Council $ 0.05 per kilowatt hour (KW / h) in December last year A premium of 70% compared to the country’s average price of approximately $ 0.030 per kWh.

The Kyrgyz parliament is debating the issue

However, several legislators raised concerns about mining activities during Parliament’s deliberations on June 3

The deputy Aaly Karashev highlighted the impact that large-scale cryptocurrency mining activities could have on Kyrgyzstan’s limited power generation capacity. because the country currently imports almost twice as much energy as it exports.

Deputy Natalia Nikitenko expressed concern about energy consumption, but also found that illegal mining operations persisted, even though The Kyrgyz Republic temporarily ceased operations in September 2019.

The Kyrgyz Republic banned cryptocurrency mining in September

The Kyrgyz government cut power to 45 mining companies in September, claiming that total company consumption of 136 megawatts exceeded that of the local regions of Issyk-Kul, Talas and Naryn combined.