Kyrgyzstan’s tax revenue from cryptocurrency mining saw sharp drop in 2024, despite the increase in cryptocurrency values.
According to a budget document by the Ministry of Economy and Finance of Kyrgyzstan, Mining taxes contributed 46.6 million Kyrgyz soms.equivalent to about $535,000 to this year’s national budget.
This figure is less than 93.7 million somsapproximately $1 million, raised in 2023, marking a decrease of more than 50%.
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Cryptocurrency miners in Kyrgyzstan are taxed at a flat rate of 10% on your electricity consumption. This rate includes additional taxes such as value added tax and sales tax.
The country’s potential for renewable energy, particularly hydroelectric power, has made it an attractive location for mining operations. According to the International Energy Agency, only Currently 10% of the country’s hydroelectric capacity is used..
This untapped resource offers affordable and renewable energy, which is very attractive for energy-intensive cryptocurrency mining.
Hydropower accounts for more than 30% of Kyrgyzstan’s energy supplybut only a small part of its potential has been realized.
Despite these advantages, declining tax revenues highlight the challenges facing the industry in Kyrgyzstan. Factors like Fluctuating energy prices, operating costs or market conditions. may have influenced the fall.
As Kyrgyzstan faces a drop in tax revenue from crypto mining, Brazil recently proposed banning stablecoin transfers to self-custodial wallets. What is driving this decision? Read the full story.
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