Norway Minister Proposes Scrapping Reduced Tax Policy For Minors

Home » Norway Minister Proposes Scrapping Reduced Tax Policy For Minors

Cryptocurrency mining surf a large quantity of electricity. And since the crypto industry saw widespread adoption in recent years, it scaled up mining activities likewise, which caused electricity shortages in some countries like Iran and Kosovo.

Similarly, the government of Norway, which is facing the same problems, now plans to remove its previously implied policy to charge crypto data centers with reduced taxes than other industries. The Finance minister of Norway, Trygve Slagsvold Vedum, suggested abolishing the scheme that typically affects Bitcoin mining farms operating within the state. 

Related Reading: Why The EU Will Sanction All Russian Crypto Transactions And Wallets

Minister Urges Crypto Mining Causes Higher Electricity Demand

Citing the rising demand for electricity, the Minister added;

We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016. In many places, the power supply is now under pressure, which causes prices to rise. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community.

The proposal to eliminate tax subsidies for miners comes after Norway’s Finance Minister presented the country’s annual budget for 2023. As per his findings, scrapping the reduced tax policy will drive $14 million in revenue.

According to the data provided by Cambridge Bitcoin Electricity Consumption Index, Norway currently generates a 0.74% global Bitcoin hashrate. A large number of Bitcoin mining centers use 100% renewable energy sources.

Bitcoin’s price is currently trading around $20,000 | BTCUSD price chart from TradingView.com

Crypto Mining’s Growing Issues In Norway

Amid the previous month, Bitcoin miners also faced criticism from Sortland, a municipality in the north of Norway. The locals cited the noise problem disrupting the environment originated from the mining and wanted the miners to quit. 

Moreover, a communist party, Red Party, also passed a bill in March to put a total ban on cryptocurrency mining in the country. But fortunately, the suggestion was rejected by the parliament in May, as only left-leaning parties supported the idea.

Speaking on the rejection of the bill, Jaran Mellerud, an analyst at Arcane Research, pointed out at the time; 

Having lost this vote, these political parties will likely make one more attempt at increasing the power tax specifically for miners, which is now their only tool left in the toolbox for making life difficult for crypto miners.

As per August’s report by an Iranian media outlet, the state police confiscated nearly 9,404 mining gadgets in the districts of Iran’s capital, Tehran. The energy blackouts the country faced the last summer pushed the authority to find out and confiscate unregistered mining platforms. 

Related Reading: Data Shows High Profit Taking In These Cryptocurrencies

Additionally, Iran had already seized a big part of mining farms in June, equating to 7,000 mining machines. It also cut off the power connection of 118 licensed mining platforms to meet the required electricity demand for the hottest summer months.

Featured image from Pixabay and chart from TradingView.com


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