Kenya To Tax Crypto: Details
- Kenya Revenue Authority (KRA) will come after the four million crypto investors in the East African region and each transaction on all crypto exchange will be taxed if the MPs approve a new amendment in an existing bill.
- The Capital Markets (Amendment) Bill, 2022, will impost tax on all the crypto coin holdings on digital exchanges and wallets and also “taxes akin to excise duty charged on bank transactions.”
- Additionally, banks will deduct 20% exercise duty on all the transactions fees and commissions that crypto brokers charge for their services.
- People or businesses involved in crypto assets in Kenya will be required to submit specific information to the Capital Markets Authority (CMA).
Kenya, a country in East Africa, aims to become the latest one to tax crypto transactions, and this might affect the trading volumes of these blockchain-based assets, which are already considerably down from last year’s bull run. Interestingly, the Kenyan government wants transactions on every exchange to be taxed, as per a report.
The report states that the Kenya Revenue Authority (KRA), an agency of the government responsible for calculation of revenue generated by businesses and individuals, will come after all the crypto investors in the nation, a number which currently breaks the 4 million mark. However, the Members of Parliament have yet to approve of the taxation law which is almost aimed to tame the booming space.
The bill titled The Capital Markets (Amendment) Bill, 2022, will impost tax on all the crypto coin holdings on digital exchanges and wallets and also seeks to impose “transaction taxes akin to excise duty charged on bank transactions,” the report states.
“Where the digital currency is held for a period not exceeding twelve months, the laws relating to income tax shall apply or for a period exceeding twelve months, the laws relating to capital gains tax shall apply,” the Bill, sponsored by Mosop MP Abraham Kirwa, says.
Meanwhile, banks will deduct 20% exercise duty on all the transactions fees and commissions that crypto brokers charge for their services. If the KRA amendment is approved by the MPs, all the crypto investors will be liable to pay capital gains tax on their holdings when they sell or trade their cryptocurrencies. On the other hand, crypto traders will have taxed on their income as well.
While the crypto sector remains largely unregulated in many across, the four million crypto investors in Kenya can now be at peace that the government is providing some clarity into the space. Many people have feared that the usage of crypto coins would be banned but the introduction of regulation means that people can use these blockchain-based currencies subject to certain restrictions mentioned in the bill.
People or businesses involved in crypto assets in Kenya will be required to submit specific information to the Capital Markets Authority (CMA). This information includes the amount of crypto held in Kenya shillings and the date on which the virtual currency was acquired and the date on which the virtual currency was sold.
“A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the amount of proceeds from the transaction, any costs related to the transaction and the amount of any gain or loss on the transaction,” the Bill states.