According to regulations published by the country’s treasury secretary, global crypto exchanges used by Kenya’s estimated 4 million users will start paying a 1.5% tax on revenues earned.
Tax-Avoiding Digital Asset Platforms
The Kenyan Treasury has said it will start levying taxes on revenues earned by cryptocurrency exchanges used by an estimated 4 million local residents. According to a report by Business Daily Africa, Kenyan authorities will rely on the 1.5% digital tax service that became effective on Jan.1, 2021.
Initially proposed in 2020, the digital tax is the Kenyan government’s attempt to extract revenue from leading crypto exchanges and tax-avoiding digital asset platforms. As reported by Bitcoin.com News in early January 2021, the Kenya Revenue Authority (KRA) said it expected to get $45.5 million (5 billion Kenyan shillings) from the tax.
Meanwhile, as shown in the 2023 regulations’ value added tax (electronic, internet and digital marketplace supply) published by Treasury Cabinet Secretary Njuguna Ndung’u, Kenya can now target global crypto exchanges.
“For the purposes of these Regulations, a taxable electronic, Internet or digital marketplace supply include…facilitation of online payment for, exchange or transfer of digital assets excluding services exempted under the Act,” the published regulations state.
Alongside Nigeria and South Africa, Kenya has one of Africa’s highest proportions of the population owning crypto. However, like its peers on the continent, Kenya has not recognized cryptocurrencies. The Central Bank of Kenya (CBK) and its governor have warned residents against dealing with crypto assets like bitcoin.
Despite the warnings, Kenyan residents continue to acquire and trade cryptocurrencies and this has prompted the government to seek ways to levy taxes on crypto transactions.
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
Source and More information: Report: Kenya to Start Levying Tax on Revenue Earned by Crypto Exchanges
Leave a Reply