New regulations in Kenya aim to create tax policy for cryptocurrencies
KRA Proposes Laws for Crypto Regulations
The Kenyan National Assembly received a bill calling for the regulation and taxation of cryptocurrency trading in Kenya today, November 21, 2022. According to a report by Business Daily Africa, the bill, if passed, will allow the Kenya Revenue Authority (KRA), the Kenyan government’s revenue collection agency, to collect taxes from over 4 million cryptocurrency merchants in Kenya.
Kenyan banks will deduct a 20% excise tax on crypto transactions
With the proposed Capital Markets Amendment, Kenyan banks will now charge a 20% fee on all commissions and fees charged on crypto transactions. Additionally, Kenyans will now pay KRA capital gains from the increased market capitalization of cryptocurrencies when they sell or use the digital currencies in a transaction if the bill passes. Furthermore, Kenyans who have made a business of trading cryptocurrency are likely to be liable for income tax on their earnings.
Kenya Prepares to Implement First Crypto Regulations
As Business Daily reported, the new bill would mark the first time Kenya has brought cryptocurrencies into the mainstream and extend regulation to transactions in digital currencies. Under the bill, cryptocurrency traders will be required to provide the Capital Markets Authority (CMA) with specific information for tax purposes. They will also need to inform the CMA of the type of virtual currency traded, the date the virtual currency was purchased, and the date the virtual currency was sold.