Norway Planning to Scrap Electricity Tax Cut For Crypto Miners
Norwegian authorities are on their way to abolishing a tax cut that has benefited crypto mining companies for years. They propose eliminating the reduced electricity tax rate for Nordic data centers.
Norway Considers Ending Preferential Tax Treatment for Crypto Mining
The Norwegian government is considering scrapping the policy of preferential tax treatment for crypto mining data centers that use cheaper electricity.
The executive power in Oslo claims that conditions have changed and that the country requires the energy that miners are currently using.
Norwegian authorities are on their way to abolishing a tax cut that has benefited crypto mining companies for years. They propose eliminating the reduced electricity tax rate for Nordic data centers, many of which mint digital currencies.
According to a government announcement, power for data centers would thus be subject to the general electricity tax rate, which also applies to other service companies. Finance Minister Trygve Slagsvold Vedum described the reason behind the move:
“In the power market, we are currently in a radically different scenario compared to when the reduced rate for data centers was announced in 2016.”
Vedum explained that the power supply is currently under strain in many locations, causing prices to rise. At the same time, Norway's crypto extraction sector has grown. “We require this strength for the sake of the community. As a result, the government will abandon the scheme,” according to an Oslo cabinet member.
Officials believe that if crypto mining is to be subject to the regular energy tax rate, the tax cut for data centers must be taken out totally. In this situation, they expect that budget receipts will rise by 150 million Norwegian kroner (more than $14 million) this year and another 110 million kroner (more than $10 million) next year.
The new step follows an unsuccessful attempt in May of this year to ban the energy-intensive mining of proof-of-work cryptocurrencies. The majority of Norwegian MPs rejected an effort made in that direction by the far-left Red Party in parliament. They also rejected a proposed increase in power tariffs for cryptocurrency miners at the time.
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