The Majlis Research Center has called for changes to the crypto currency mining regulations in order to make the industry profitable for miners in particular and the economy in general.
The parliament’s think tank proposed adding a paragraph to the annual budget bill, according to which the Energy Ministry would be required to supply crypto miners with the needed electricity at up to 4,000 rials per kilowatt-hour, except in three months of summer when the power consumption peaks.
Tax rules for mining units should be the same as other businesses, the body proposes adding that the generated taxes could be used for development of water supply systems in rural areas.
In a paper published earlier this week, the influential body claimed Iran has an estimated 20,000 MW of unneeded electricity during nine months of the year. "Using this capacity in a correct manner can generate up to €1 billion in revenue for the economy."
The paper criticized the government for neglecting seasonal trends in power consumption and setting electricity rates so high that pushes miners towards illegal methods for accessing the national power grid.
In spring, the Energy Ministry along with the Law Enforcement Forces, shut down a large number of crypto mining farms with the aim of preventing possible blackouts in summer.
After that the government significantly raised power tariffs for crypto mining to 7 cents/kilowatt-hour, to address concerns over possible power outages in summer and stop “indirect subsidies going into the pockets of crypto miners.”
New rates were approved by the government as part of a plan to “regulate” the crypto mining business.
Other Options
The government then said the prospective miners have another option regarding electricity use. It said they can set up their own mini-grids or renewable power plants.
Those who want to build mini power plants should decide the location and subscribe to the national gas grid. The gas feedstock price for grids would be equal to 70% of gas export prices.
Back in November and in a bid to address concerns over high electricity prices for legal crypto miners, Iran's Ministry of Energy revised the tariffs for authorized miners subject to seasonal power consumption patterns.
As per the measure, miners would be charged 4,800 rials for one kilowatt-hour -- equal to half the electricity export rate in autumn, winter and spring. However, billings would be made based on 19,300 rials/kw, twice the price for exported electricity, in the peak summer season (June to Sept).
However, the MRC said setting different rates for power consumption has made it hard for miners and investors to measure the profitability of their business.
The think tank also pointed to the government's decision to exempt miners who export cryptocurrencies from paying tax, saying, "even though cryptocurrencies are like foreign currencies, taxing this business is of importance because it helps the government to ensure that the output is exported.”
Cryptocurrency miners are eligible for tax exemption if, like non-oil exporters, they repatriate their overseas earnings, according to Iran's National Tax Administration.
As per INTA regulations, crypto mining is a taxable business similar to other industrial activities, and should comply with rules of the Central Bank of Iran in repatriating their overseas earnings.
Special tax regulations regarding the location of industrial units and their distance from major cities do not apply to crypto mining units, INTA says. National rules prohibit the setting up factories near major urban areas. As per law, production units must be established at least 120 km away from Tehran, 50 km from Isfahan or 30 km from other large cities.
