Norwegian officials are currently reviewing proposals to eliminate preferential tax treatment of data centers that mine cryptocurrency using cheaper electricity. Oslo’s executive powers state that the conditions have changed, and they need the current energy used by miners.
Norway Seems to Collect More Tax and Save Power in Mining Companies, which means they are more likely to reduce their tax incentive.
Norwegian authorities have announced that they will scrap the tax cut which has been a benefit to crypto mining companies for many years. They propose to abolish the low electricity tax rate that data centers in Norway pay for, as many digital currencies are being created there.
In a statement published by the government this week, it stated that power for data centers would be subject to general electricity tax. This is the same rate as for all other service industries. Trygve Salagsvold Vestum, the Finance Minister explained why this was necessary.
The power market is in an entirely different place now than it was in 2016, when the lower rate for data center rentals was implemented.
Vedum noted that prices are rising because of the pressure on power supply in many places. In Norway, crypto extractive industries have also expanded. “We need this power for the community. The government will therefore discontinue the scheme,” the member of the cabinet in Oslo was quoted as stating.
The government noted that investigations have revealed that it’s almost impossible to tell the difference between the electrical energy that is used in the production of digital coins, and the one that is consumed by data centres for other purposes.
Officials think that the tax reduction for data centers should be eliminated completely if crypto mining will be made subject to the regular electricity rate. Officials estimate that this will result in budget receipts increasing by 150 million Norwegian Kroner (over $14 millions) and 110 million Norwegian Kroner (more than 10 million) next year.
This latest development follows a May failed attempt to ban energy-intensive mining proof-of work cryptocurrencies. The majority Norwegian lawmakers rejected the push from the far-left Red Party, which was pushing for this ban. They also rejected a proposal to increase the electricity tax for crypto miners.
Are you concerned that Norway’s tax cuts for miners will make it less attractive as a destination for crypto mining? Please comment below with your opinions.
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