Kenya is moving forward with a plan to tax and regulate cryptocurrencies in an effort to provide transparency to the market and curb financial crimes committed using digital currency.
By introducing a law to regulate and tax cryptocurrencies, Kenya is about to alter its legal environment. After receiving approval from the Finance Committee, the Capital Markets (Amendment) Bill, 2023, will now be brought before the National Assembly for debate.
The measure establishes cryptocurrency wallets and exchanges as subject to capital gains tax and classifies crypto assets as securities. Its stated goal is the elimination of digital currency-related financial crimes by making the law clearer.
Committee head Kimani Kuria said, “We require laws to govern millions of Kenyans engaging in cryptocurrencies.”
Crypto transactions denominated in Kenyan shillings must be reported to the Kenya Revenue Authority, and Kenyans are obligated to pay capital gains tax on these transactions according to the proposed law. Fees and commissions from cryptocurrency transactions will also be subject to a 20% excise tax by financial institutions.
Kenya’s action is in line with international initiatives to control cryptocurrency, such as the United Kingdom’s determined hunt for undeclared crypto holdings. Once passed, the measure would make Kenya the first country in the region to regulate digital currencies, putting the country in the vanguard of nations adjusting to the digital currency industry.
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