Kazakhstan Offers Three Year Tax Break to Lure Back Crypto Assets That Left the Country

According to Bourse News, Kazakhstan's government has signed a decree designed to encourage citizens to declare their crypto asset holdings, move them onto regulated domestic platforms, and bring back capital that left the country or went underground about five years ago after authorities cracked down on miners' heavy electricity use. Under the decree, private investors will receive a three year exemption from personal income tax on digital asset trading profits, provided the assets are not linked to fraud, money laundering or unlicensed crypto services.

Kazakhstan became the world's second largest bitcoin mining hub after the United States following China's 2021 mining ban, but the sudden influx of miners strained the country's aging power grid. In October 2021, a surge in electricity demand knocked out three power plants in the country's northeast, with miners consuming about eight percent of Kazakhstan's total electricity output at peak. Authorities responded by repeatedly tightening power consumption rules, which pushed a share of miners out of the country; the new decree is now an attempt to bring that same capital back.