In order to legitimise crypto mining in the country, the lawmakers in the Kyrgyz republic are looking to tax and regulate crypto. The bill would amend the tax code and add around $4 million in taxes for the government and also help the crypto space by defining them more precisely and bring proper definition to terms such as virtual assets and crypto mining. The Kyrgyz Republic has met crypto with an iron fist since July 2014 when it banned crypto assets a mode of payment. The bill, initially proposed in 2019, could bring crypto back to life and would be the first to provide a framework for their running in the country. The republic has a $1 billion budget and is looking to add to it by putting a fixed tax of 15% on crypto miners to add to its revenues.
The designated electricity rates were discussed in great details too and a few voiced their disapproval. Few lawmakers believe crypto mining would put a tremendous amount of stress on the electricity generation oh the country which is already limited. Deputy Natalia Nikitenko highlighted that despite the implications a few crypto mining firms are already running illegally and they could benefit from such a bill. The country stopped its supply to more than 40 crypto mining firms for exceeding the electricity limit of even its major cities.
While electricity and illegal crypto mining firms does remain a concern, this could be first in the line of frameworks to come to enable further crypto adoption in the country. The 15% flat tax would be set on the profits made by the crypto miners. For a country that has prohibited crypto payments for more than 6 years now, this is definitely a step in the right direction.
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