Kyrgyzstan’s tax revenue from cryptocurrency mining saw a sharp decline in 2024, despite rising cryptocurrency values.
According to a budget document by Kyrgyzstan’s Ministry of Economy and Finance, mining taxes contributed 46.6 million Kyrgyzstani soms, equivalent to about $535,000, to the national budget this year.
This figure is a drop from the 93.7 million soms, approximately $1 million, collected in 2023, marking a decrease of over 50%.
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Cryptocurrency miners in Kyrgyzstan are taxed at a flat rate of 10% on their electricity usage. This rate includes additional taxes such as value-added tax and sales tax.
The country’s potential for renewable energy, particularly hydropower, has made it an attractive location for mining operations. According to the International Energy Agency, only 10% of the country’s hydropower capacity is currently being used.
This untapped resource offers affordable and renewable energy, which is highly appealing for energy-intensive cryptocurrency mining.
Hydropower accounts for over 30% of Kyrgyzstan’s energy supply, but only a small portion of its potential has been developed.
Despite these advantages, the decline in tax revenue highlights challenges faced by the industry in Kyrgyzstan. Factors such as fluctuating energy prices, operational costs, or market conditions may have influenced the drop.
As Kyrgyzstan faces a drop in crypto mining tax revenue, Brazil recently proposed banning stablecoin transfers to self-custodial wallets. What’s driving this decision? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
