Kenyan Lawmakers Open Talks on Crypto Tax, Here’s What We Know
Kenya thinks it should bring the crypto sector under the tax regime or not. Legislation is pending approval in Kenya, which could give crypto-assets the chance to be legalized as tradable assets. The name of the proposed legislation is the Markets Markets (Amendment) Bill, 2022. According to a report by the United Nations, about 8.5 percent of Kenyans, who make up 4.25 million people in that country, have crypto assets. If and when the law is approved, it will require investors to pay capital gains tax to the Kenya Revenue Authority. Kenyan banks will deduct a 20 percent tax on crypto transactions.
Investors will also be mandated to disclose information about their crypto ownership to the government’s financial regulator, called the Capital Markets Authority.
The Ministry of Finance has received a major boost to pass a private member’s bill seeking to amend the Market Authorities Act introduced last week. Now that the Government of Kenya has introduced its own version of the CMA law to tax crypto transactions! @binance @BinusuX pic.twitter.com/ObfDZDpoPI
— Louis N. Kizito (@LouisNkizito) October 21, 2022
“The amendment will provide certain provisions for the regulation of digital currency exchange in Kenya, including the definition of digital currency, its creation through crypto mining and providing regulations regarding digital currency trading,” a CoinDesk Report he quoted the bill’s sponsor, Mosop MP Abraham Kirwa as saying.
Due to the lack of regulations governing the crypto sector, Kenya has become a popular destination for crypto scammers.
In 2021, crypto fraudsters are reported to have robbed Kenyans of up to $120 million (roughly Rs. 915 crore). These figures were revealed by Kenyan Cabinet Secretary Joe Mucheru when he spoke at a conference held in March.
At that time, the minister had urged people to continue flagging fake or suspicious organizations so that others could be notified in advance.
The crypto market in Nigeria, Kenya, Tanzania, and South Africa together saw 1,200 percent growth, reaching a market value of $105.6 billion (roughly Rs. 775 crores) in one year, a Chainalysis report said on September last year.
After this rapid growth trajectory, crypto players from all over the world are flocking to the African continent. In October, Coinbase-backed Mara Digital Wallet service in Kenya and Nigeria.