For the second time, Kyrgyzstan is deliberating on the act of taxing cryptocurrency mining, which, if approved, could legitimize the activities in the country. However, many lawmakers still do not agree with the proposal, raising some concerns related to large-scale mining.
Kyrgyzstan lawmakers consider taxing cryptocurrency mining
Kyrgyzstan lawmakers are considering a bill that could mark the beginning of a tax regime for cryptocurrency mining in the Kyrgyz Republic. Particularly, the law, which aims to create tax obligations for crypto miners, was intended to grow the government’s revenue source.
The bill put forward a 15 percent taxation rate on any profits incurred through the sale of digital currencies created via cryptocurrency mining. At the initial proposal of the bill last year, it was estimated that the government would garner at least $4.2 million from cryptocurrency mining activities.
Kyrgyzstan lawmakers further deliberated on mapping out a certain electricity consumption rate for crypto miners, amid the $0.05 per kilowatt-hour suggested by the country’s Supreme council last year.
Also, the bill sought to establish a comprehensive definition of ‘mining’ and even ‘virtual assets’ in the setting of cryptocurrency, regardless of the fact the country prohibited the use of cryptocurrencies as a payment method. Perhaps, upon approval, the bill would represent the first actionable move by the government to establish a regulated framework for digital currency activities.
Many lawmakers do not consent to crypto mining
While deliberating on the bill on June 3, some other lawmakers didn’t agree with the proposal. They raised several concerns relating to the possible impact of cryptocurrency mining activities, especially on the side of electricity consumption, as Deputy Aaly Karashev explained.
Deputy Natalia Nikitenko reiterated Karashev’s comment, adding that there were still records of illicit crypto mining activities in the country, despite prohibiting the operations in September last year.