The Government of Norway ends subsidy on electricity for cryptocurrency miners.
As per a report from local news outlet Afterposten, in its state budget, the government stated that digital currency miners in the nation will have to pay normal electricity tax from the New Year.
At the moment, big mining firms get the same electricity tax discount as other power-intensive industries in the nation. Those with a range of more than 0.5 megawatts are charged only 0.48 øre ($0.00056)/kilowatt hour rather than standard rate of 16.58 øre ($0.019). A øre is 100th of a Norwegian krone.
That implies that eligible miners have been paying just 2.8% of the standard rate to power their rigs.
Norwegian parliamentary spokesperson Lars Haltbrekken stated in the report, “Norway cannot continue to grant huge tax incentives for the dirtiest form of cryptographic output like bitcoin. It needs a lot of energy and generates large greenhouse gas emissions globally.”
Now with an end to the subsidy, cryptocurrency miners will have to shell out higher taxes, which is likely to decrease their net profits at a time when low cryptocurrency prices are already putting pressure on the industry.
The Norwegian Tax Administration reportedly introduced the suggestion to exclude Norway’s subsidy. The proposal has now been accepted in the state budget and will be effective from January 2019.
Mr. Roger Schjerva, the chief economist of tech industry interest body, ICT Norway, reported Aftenposten:
“This is shocking. Budgets have changed framework conditions without discussion, consultation or dialogue with the industry.”
Ending the subsidy will push cryptocurrency miners to Sweden and Denmark, he argued, adding that the nation mustn’t “just say no to income and work in many municipalities in Norway.”