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Tax exemption on crypto mining from solar power in Uzbekistan

Tax exemption on crypto mining from solar power in Uzbekistan
Written by Arindam
Tax exemption on crypto mining from solar power in Uzbekistan

Uzbekistan has decided to allow mining of cryptocurrencies with solar power. Apart from this, such firms will also be fully exempted from income tax. The government of Uzbekistan wants crypto miners to meet the power requirement for their mining farms by installing their own solar panels.

An order regarding this was issued by the President of Uzbekistan last week. Mining firms will also have the option of being connected to the power grid by paying twice the regular tariff, Reuters reports. However, additional surcharge may be levied on these firms when the consumption of electricity is high. Crypto mining will not require a license, but firms associated with it will have to register with the recently created Uzbek National Agency for Perspective Projects. Mining of some cryptocurrencies like bitcoin requires a process called proof of work. In this, complex puzzles of mathematics have to be solved through computers. These computers require high consumption of electricity.

Cryptocurrencies were legalized in Uzbekistan about four years ago. However, trading was allowed on only one crypto exchange in Uzbekistan. Uzbekistan has also undertaken some renewable energy projects including solar and wind power. Kazakhstan, adjacent to Uzbekistan, became the second largest center for bitcoin mining after the US cracked down on crypto mining last year. The number of miners in Kazakhstan is increasing. However, they have a large number of illegal miners. The government of Kazakhstan had decided to increase the tax on electricity for crypto miners. Earlier, in some other countries like Iran, there has been a shortage of electricity due to crypto mining.

Due to the boom in crypto mining, the high consumption of electricity is adding to the troubles of Kazakhstan. Because of this the authorities are taking action against illegal crypto mining centers. There is a shortage of electricity from these mining centers and this is also increasing the threat to economic security. Kazakhstan’s Financial Monitoring Agency recently raided more than 100 crypto mining centers.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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