A Decrease in Crypto Mining Tax Revenue in Kyrgyzstan in 2024

A recent report from the 2024 Kyrgyz government has revealed a significant decrease in crypto mining tax revenue, with only around $535,000 contributed this year. This marks a drop of nearly 50% compared to last year’s tax collection from cryptocurrency miners.

Decline in Crypto Mining Tax Collection

The budget document released by the Kyrgyzstan Ministry of Economy and Finance shows that the revenue from crypto mining taxes has fallen by 50% in 2024. The total tax collection from cryptocurrency miners amounted to over 46.6 million Kyrgystani soms, equivalent to approximately $535,000. In contrast, the tax revenue from crypto mining in 2023 reached 93.7 million soms, valued at around $1.08 million.

Additionally, local media outlet 24.kg reported a decrease in tax receipts from crypto miners in the last seven months. Since August, the revenue generated from crypto mining taxes in the first half of 2024 has dropped by nearly 30% compared to the same period in 2023.

Contrasting Results

The decline in tax revenue from the crypto mining sector in Kyrgyzstan is surprising, considering the region’s reputation as a favorable destination for crypto mining due to its abundant renewable energy resources, particularly hydroelectric power.

The results reported by Kyrgyzstan’s Ministry of Economy and Finance at the end of this year starkly contrast the initial success seen earlier in 2024. In January, the Ministry reported revenue of 78.6 million soms (approximately $883,000) from crypto mining taxes in the first months of the year, a significant increase from the 2022 tax revenue of 11.1 million soms ($133,200) collected during the same period last year.

It is important to note that Kyrgyzstan’s crypto mining tax rate accounts for around 10% of the electricity fee paid by crypto miners in the country, which already includes value-added tax and sales tax.