Kyrgyz authorities have reported a sharp decline in tax revenues from mining, despite the fact that the value of mined cryptocurrencies has increased significantly this year.
According to the country's Ministry of Economy and Finance, the budget received half as much in taxes from mining companies this year. This figure fell from 93,7 million Kyrgyz soms (more than $1 million) in 2023 to almost 46,6 million soms ($535) this year.
State Budget of Kyrgyzstan
According to the country's Ministry of Economy, revenues began to decline in the second half of 2024. Since August, they have fallen by almost 30% compared to the same period in 2023.
The mining tax rate in Kyrgyzstan is 10% of the cost of electricity used to mine cryptocurrencies, including VAT and sales tax.
The sharp decline in revenue from miners came as a surprise to the country's authorities. Especially since the region is known as one of the most suitable for cryptocurrency mining due to its huge number of renewable energy sources in the form of hydroelectric power plants.
According to a report by the International Energy Agency, more than 30% of all electricity in Kyrgyzstan is generated by hydroelectric power plants. However, this is only 10% of the country's hydropower potential.
