Kyrgyzstan will legalize cryptocurrency mining and introduce a 15% tax

Legislators in the Kyrgyz Republic are considering a bill on taxation and regulationcryptocurrency mining activities.

Bill on Amendments to the TaxCode of the Kyrgyz Republic ”aims to increase government revenue through taxation for miners. Also in this document, a clear definition of the terms “virtual assets” and “mining” of cryptocurrencies is given.

If the law is passed, the new regimetaxation will be the first important step towards the legalization of cryptocurrency by the Kyrgyz Republic, although in July 2014 the country banned the use of cryptocurrencies as a means of payment.

The document talks about tax for miners ona single rate of 15% of the profits resulting from the sale of mined crypto assets. For the first time, the bill was proposed in August 2019 and could allow attracting an additional $ 4.2 million per year to the budget of the Kyrgyz Republic, amounting to approximately $ 1 billion.

The parliament also discussed the introductionthe established electricity tariff for miners, following the proposal of the Supreme Council in the amount of $ 0.05 per kilowatt-hour (kW / h). Considering the average price in the country in December last year at $ 0.030 kW / h, the increase was about 67%.

However, one of the deputies emphasized thatlarge-scale crypto mining can have a negative impact on the state of the electric power industry in Kyrgyzstan, since the country currently imports almost twice as much electricity as it exports.

It is known that in September 2019 the governmentKyrgyzstan stopped supplying electricity to 45 mining companies under the pretext that the total consumption of companies by 136 megawatts exceeded the consumption in the local regions of Issyk-Kul, Talas and Naryn combined.

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