Kazakhstan Auditors Go After Crypto Miners Accused of Exploiting Tax Benefits

Auditor in Kazakhstan has identified crypto mining companies that are eligible for tax benefits normally granted to businesses involved in innovation development. This is a sign that the “Digital Kazakhstan” program is not being properly implemented, according to the representative of the country’s Accounts Committee.

Akylbay Ibraev, quoted by Inbusiness.kz, explained that the companies became residents of the Astana and received support to invest in cryptocurrency mining projects when this is not their main purpose.

Ibraev disclosed that tax preferences were granted to five mining farms for 8.5 billion Tenge ($18 million) during the third quarter 2021. They should not be eligible for tax exemptions, the official said. He stated that the hub’s task was to attract and implement investments in IT technologies.

However, it turns out that the miners did not violate the law. The Accounts Committee proposes amends to prevent such situations from happening in the future. Ibraev said that based on our audit, the government was recommitted to improve this area’s legislation.

Furthermore, Askar Zhambakin, Kazakhstan’s Deputy Minister for Digital Development, Innovation and Aerospace Industry, says that the losses or damages caused by crypto businesses are not the responsibility of the state.

“These mining farms, along with other entities and IT companies have the right to register [at tech park]. The government official stated that they are changing the registration rules to address the issue. He stated that Astana Hub residents can benefit from tax breaks, affordable office space and other support.

After China launched an offensive against Kazakhstan’s mining industry last year, Kazakhstan became a major mining hub. The country’s increasing power deficit has been blamed on the miners. In February, President Kassym Jomart Tokayev directed the financial watchdog of the nation to identify all mining entities and verify their tax and customs records.

The winter months have seen mining companies suffer from power outages and some companies have had to move to the United States due to electricity shortages . Authorities shut down more than 100 cryptocurrency mining facilities in Kazakhstan between March 2 and 3.

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