Crypto Miners Pay Kazakhstan $7 Million in Taxes Amid Uncertain Future for Sector

May 5, 2023 Bitcoin.com

Kenya considers tax on crypto, NFT transfers and online influencers

May 5, 2023 Coin Telegraph

Africa

A bill introduced in Kenya could see a tax added to cryptocurrency and NFT transfers and has been met with a mixed reaction online.

Kenya's lawmakers are considering the introduction of a 3% tax on cryptocurrency and nonfungible tokens (NFTs) transfers and a 15% tax on monetized online content, according to a newly introduced bill.

Introduced to the Kenyan parliament on May 4, The Finance Bill, 2023 would enact a digital asset tax on “income derived from the transfer or exchange of digital assets” which also included specific language for NFTs.

The bill will undergo five rounds of readings, committees and reports by the National Assembly, if passed, it will then be passed to the president for final assent into law.

Crypto exchanges or those who initiate the transfer of crypto or NFTs would be required to collect the tax, having to deduct 3% of the transfers’ value to be paid to the government. Exchanges not registered in Kenya would have to register under the tax regime.

Kenya will now tax
- crypto
- monetised online content pic.twitter.com/1mlJ5dXt83
— Mpumelelo Ndiweni (@mpumiglobal) May 4, 2023

The bill also seeks to bring about a tax on “digital content monetization,” levying a 15% tax on content creators paid to promote and advertise products and services online including but not limited to sponsorships, affiliate marketing, merchandise sales and paid subscriptions.

The digital assets section of the bill has seen a mixed response online.

Some were pleased to see that crypto and NFTs were seemingly now officially recognized in the country. Previously, the Central Bank of Kenya has warned against using crypto but no outright prohibitions were put in place.

Rufas Kamau, a Kenyan research and markets analyst, tweeted on May 4 calling the 3% tax “a joke” and sarcastically asked if it applies to “supermarket and credit card loyalty points.”

The tax rate is 3% on every transaction. What a joke!
— Rufas Kamau ⚡ (@RufasKe) May 4, 2023

Kenyan crypto advocacy group, Cryptocurrency Kenya, tweeted that such a digital tax “must apply to [...] everything digital” claiming a crypto-only tax is “targeted harassment.”

It also pointed out the tax was higher when compared to the fees charged by exchanges, comparing the government's proposed 3% tax to Binance’s 0.10% trading fee.

"For the TRANSFER or EXCHANGE value"

Binance charges a 0.10% fee for trading on the platform as well as a 0.50% fee for Instant Buy/Sell

The government is looking to get 3% ...

Well...#CryptocurencyKE #SpaceYaCrypto #Bitcoin https://t.co/COr6cfxZy3
— CRYPTOCURRENCY KENYA (@CryptoHubKE) May 4, 2023

Kenya first made an effort to regulate crypto in November, introducing amendments to its capital market laws that required those who owned or dealt in crypto to report information on their activities to the authorities.

Kenya scrapes into being in the top 20 countries when it comes to crypto adoption. A September report from blockchain analytics firm Chainalysis placed the country 19th in terms of crypto adoption.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

White House advisors renew push for 30% digital mining energy tax

May 3, 2023 Coin Telegraph

Biden

The May 2 blog post by the White House’s Council of Economic Advisers (CEA) has already attracted strong criticism from the community.

The Biden administration has renewed its push for a 30% Digital Asset Mining Energy (DAME) tax on cryptocurrency miners, part of efforts to minimize the industry’s alleged impact on climate change.

The proposed crypto-mining tax was first announced on March 9 as part of President Biden's FY2024 budget and seeks to impose a phased-in 30% excise tax on electricity used by crypto-miners.

Today the CEA released a blog highlighting a new tax in the President’s budget, the Digital Asset Mining Excise Tax (“DAME Tax”), a tax equal to 30 percent of the cost of the electricity cryptominers use once fully phased in. 1/ https://t.co/944x0wVVB5
— Council of Economic Advisers (@WhiteHouseCEA) May 2, 2023

“An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms,” the Department of Treasury wrote at the time. Bitcoin (BTC) fell under $20,000 just a day later.

However, a May 2 statement from the White House’s Council of Economic Advisers (CEA) has brought the proposal back to light again, in attempts to justify the need for the new tax.

“Currently, cryptomining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate,” the CEA wrote.

#Bitcoin mining is good for the grid and good for the environment, yet Biden wants to tax it 30% and send this valuable industry into the hands of Russia.
— Dennis Porter (@Dennis_Porter_) May 2, 2023

“The DAME tax encourages firms to start taking better account of the harms they impose on society,” it wrote, adding:

“While crypto assets are virtual, the energy consumption tied to their computationally intensive production is very real and imposes very real costs.”

The blog also referenced reports suggesting crypto mining has “negative spillovers” on the environment, quality of life, and electricity grids and that pollution from electricity generation falls on low-income neighborhoods and communities of color, while pushing up the cost of electricity for consumers.

It even suggests that crypto mining using existing clean power (such as hydropower) can still have a negative impact on the environment, by pushing other electricity users to “dirtier” sources of electricity.

Screenshot of CEA's thread on the environmental impact of crypto mining. Source: Twitter

The Twitter thread posted by the Council of Economic Advisers has attracted widespread criticism from the community, with some calling it “misinformation” and “propaganda” while one Twitter user argued such a tax would “simply push Bitcoin mining to Russia & other countries."

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Revolut taps Koinly for cryptocurrency tax reports

April 28, 2023 Coin Telegraph

Coin Telegraph

Digital bank Revolut has partnered with Koinly to integrate cryptocurrency tax report services for users.

As cryptocurrencies increasingly fall under the purview of global tax authorities, digital bank Revolut has integrated an automated tax reporting service for its users.

The digital financial services provider has partnered with cryptocurrency tax solution Koinly to allow users to generate cryptocurrency tax reports to work out gains and losses. Revolut users will be able to synchronize their cryptocurrency transaction history with Koinly to expedite tax calculations.

A discount on the service is being offered to new Koinly customers, with the onboarding process facilitated through the Revolut mobile app.

Revolut serves over 18 million users across several jurisdictions worldwide following the acquisition of a banking license in Lithuania in late 2018. The digital bank has been offering cryptocurrency custody services since December 2017.

The fintech firm has since expanded its services around the world in conjunction with regulatory compliance processes in various countries. This includes receiving a green light from the United Kingdom’s Financial Conduct Authority in September 2022 to offer cryptocurrency products and services in the country.

Koinly’s head of tax Danny Talwar previously highlighted the importance of cryptocurrency tax services in helping citizens in the United States take advantage of “tax loss harvesting.“

Speaking to Cointelegraph ahead of the U.S. tax deadline in April 2023, Talwar said taxpayers would do well to take advantage of depressed cryptocurrency markets to reduce their tax liabilities.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips