Kyrgyzstan’s Crypto Mining Tax Revenue Drops by 50% in 2024
A recent report on the 2024 Kyrgyz government has revealed that taxes collected from cryptocurrency mining have significantly decreased compared to the previous year. According to a budget document released by the Kyrgyzstan Ministry of Economy and Finance, crypto mining tax revenue dropped by 50% this year.
In 2024, the tax collection from cryptocurrency mining amounted to over 46.6 million Kyrgystani soms, equivalent to approximately $535,000. This is a stark decline from last year’s collection of 93.7 million soms, which was worth around $1.08 million. The Ministry of Finance also noted a decrease in tax receipts from crypto miners over the past seven months, with revenue falling by nearly 30% compared to the same period in 2023.
Despite Kyrgyzstan being a sought-after destination for crypto mining due to its abundant hydroelectric resources, the decrease in tax revenue from this sector has raised eyebrows. The country’s Ministry of Economy and Finance initially reported promising results at the beginning of the year, with revenue from crypto mining taxes reaching 78.6 million soms (approximately $883,000) in the first few months of 2023.
This significant increase was a notable improvement from the 2022 tax revenue of 11.1 million soms ($133,200) collected during the same period the previous year. The crypto mining tax rate in Kyrgyzstan accounts for around 10% of the electricity fee paid by crypto miners, which already includes value-added tax and sales tax.
The fluctuating tax revenue from cryptocurrency mining in Kyrgyzstan highlights the challenges faced by the government in regulating this burgeoning industry. While the country’s abundant renewable energy resources make it an attractive location for crypto mining operations, ensuring consistent tax collection remains a priority for policymakers.
As the year progresses, Kyrgyzstan will need to closely monitor the crypto mining sector to address any fluctuations in tax revenue and implement strategies to sustainably support this growing industry. Stay tuned for further updates on the evolving landscape of crypto mining in Kyrgyzstan.