Higher Electricity Taxes Coming for Crypto Miners in Norway
The government of Norway is reviewing a policy that gives cheaper power to data centers. Crypto miners have been enjoying preferential treatment with regard to taxes. The government says times have changed and there is a need for energy usage.
Government U-Turn
The authorities in Oslo are planning on an effective way of scraping the tax cut. Crypto miners have enjoyed the privilege for years. Many data centers in the country mint cryptocurrencies.
The government is considering proposals on how to make more energy available for households. Data center power will now become subject to the same tax rate as everyone else. It will be the same that applies to other industries, according to the government.
The government mentioned this in an announcement it released this week through the Finance Minister. The Minister, Trygve Vedum, elucidated the idea behind the government’s decision. He explained the situation back in 2016 when the low-rate decision was made.
He said the times are completely different now and the government can’t afford it. Power is currently under pressure in many areas of the country. That has consequently resulted in a rise in energy costs.
The crypto mining sector in Norway has also grown. Vedum said that power is now needed for community use. Hence, the government needs to discontinue the policy, the Minister said.
The government also stated that it is difficult to differentiate power usage. Investigators can’t tell when power is used by either miners or data centers. Hence, the tax cut for data centers has to be scrapped for miners to pay regular fees.
More Revenue Expected
Officials estimated that there will be an increase in budget receipts by doing so. They expect an additional 150 million Kroner in the short term. They also expect it to rise by another 110 million Kroner in 2023.
The government tried to ban proof-of-work mining in May but failed to achieve it. The proof-of-work mining is a power-intensive process. Most lawmakers rejected the Red Party’s move against the proof-of-work ban.
The lawmakers also rejected a proposal to raise power rates for cryptocurrency miners. But it has become necessary now.
Energy consumption has been behind most debates for crypto mining regulation in Europe. The debates will become louder now that there is an energy crisis. It is majorly a result of the political fallout with Russia.
Russia supplies a large portion of gas used in Europe. Sanctions over the war in Ukraine have seen a gas supply shortage.
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