Companies that were minting digital currency in Kazakhstan were reportedly taking advantage of tax advantages they were not permitted to get. In order to get millions of dollars in tax breaks, the crypto businesses were registered as “innovative enterprises.”
Five Kazakhstan mining companies received tax exemptions totaling $18 million
In Kazakhstan, auditors have discovered crypto mining operations that were able to profit from tax breaks generally reserved for businesses that create new technologies. According to a spokesman for the country’s Accounts Committee, which monitors budget expenditures, “Digital Kazakhstan” is not being implemented correctly.
Akylbay Ibraev revealed that five mining farms received tax breaks totaling 8.5 billion tenge ($18 million) in Q3 2021. The official said they weren’t eligible for tax breaks.
But it turns out the miners haven’t broken any laws. The Accounts Committee now suggests changes to prevent future occurrences. Ibraev said, “We recommend to the government to strengthen the law in this area.”
Moreover, according to Askar Zhambakin, Kazakhstan’s Deputy Minister of Digital Development, Innovation, and Aerospace Industry, crypto firms are not responsible for any financial losses.
Kazakhstan’s mining industry
Kazakhstan, which became a mining hotspot last year after China initiated an anti-mining campaign, has also stepped up its anti-mining efforts. President Kassym-Jomart Tokayev instructed the country’s financial watchdog to identify all mining businesses and review their tax and customs documentation in February.
Winter power interruptions have harmed mining industries, forcing some to migrate to other nations like the US. In mid-March, Kazakhstani officials shut down over 100 currency minting operations, including legitimate bitcoin farms.