Government of Uzbekistan Triples Tax on Electricity for Crypto Miners
The government of the Republic of Uzbekistan has ordered a 300% increase on electricity tariffs for cryptocurrency miners.
According to a Sept. 27 announcement, the Cabinet of Ministers of the Republic of Uzbekistan has decreed that cryptocurrency miners must pay three times more the existing electricity tariffs.
The provision follows an Aug. 22, 2019 decree from President Shavkat Mirziyoyev entitled “On Accelerated Measures to Improve Energy Efficiency of Economic Sectors and the Social Sphere, Implement Energy Saving Technologies and Develop Renewable Energy Sources” and to further motivate the rational use of electrical energy by consumers.
Uzbekistan’s approach to crypto and blockchain
Last September, Mirziyoyev ordered the establishment of a state blockchain development fund called the "Digital Trust." The fund's primary goal is to integrate blockchain into various government projects, including healthcare, education and cultural areas. The organization is set to be responsible for international investment in the Uzbek digital economy.
Earlier the same month, a decree legalizing crypto trading — also making it tax-free — and mining in the country came into force. According to the law, foreign nationals can only trade cryptocurrencies in Uzbekistan by creating a subsidiary in the country.
The law also specifies a minimum capital requirement of roughly $710,000 to establish a crypto exchange. Furthermore, crypto traders will not fall under Uzbek stock market regulations and will be relieved of their obligation to pay taxes on trading revenues.
Mining regulation in other countries
In June, the Iranian government announced that they would cut power to crypto mining operations until new energy prices were approved. Iran’s Ministry of Energy reportedly revealed that the country had seen a 7% spike of electricity consumption over a monthly period ending on June 21, 2019. The Ministry believes that the surge was caused by the growing number of crypto mining activities in the country.
China’s Bitcoin mining scene is a major player in the global hash rate, with China-based mining pools reportedly mining potentially 70% of all the coins created yearly. However, in April, the Chinese government said that it was considering the elimination of crypto mining in the country.