Norway scraps electricity tax subsidy for Bitcoin miners
A power subsidy that Bitcoin miners were enjoying in Norway has been scrapped, according to a local news report. According to a report by Aftenposten, miners will be have to pay normal tax for electricity as per the new state budget of the government, starting next year.
Currently, larger local mining firms are enjoying the same tax discount on electricity as other power-intensive industries in the country. Norwegian Tax Administration, an agency under the authority of the country’s Ministry of Finance, reportedly suggested scrapping the subsidy in Norway. The proposal has now been approved and will be effective from January, 2019.
With the government’s new policy, Bitcoin miners will have to now pay high taxes, which will likely impact their net profits. This is especially concerning since the industry is under pressure due to low crypto prices. According to current policy, only 0.48 øre ($0.00056) per kilowatt hour is charged for over 0.5 megawatts capacity instead of the standard rate, which is of 16.58 øre ($0.019). It means that the Norwegian miners have been paying only 2.8 percent of the standard rate.
“Norway cannot continue to provide huge tax incentives for the most dirty form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,” said Lars Haltbrekken, Norwegian parliamentary representative.
“This is shocking. Budgets have changed framework conditions without discussion, consultation or dialogue with the industry,” Roger Schjerva, chief economist of tech industry interest body ICT Norway, told Aftenposten. Moreover, this step could push miners to move to Sweden and Denmark. He added that the country shouldn’t “just say no to income and work in many municipalities in Norway.”
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