Taxing is not loving – Kenya was on the list of countries that want to increase the tax burden on cryptocurrencies, even if some institutions continue to convey the idea that the Bitcoin (BTC) and its cadets are simply useless.
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Taxation of cryptocurrencies in Kenya
On November 21, the Capital Markets Bill in Kenya saw the addition of a new amendment, which relates to the taxation of cryptocurrencies. In this context, the holders of cryptocurrencies or the persons who trade them will have to provide information on their activities to the capital markets authority.
In addition, the bill provides for the payment of capital gains taxes when using or selling digital currencies. L’income tax, varying from 10-30% in Kenya, applies to cryptocurrencies that have been held for less than a year. Beyond this period, thecapital gains tax would apply, if this bill is passed.
Today, cryptocurrencies are already subject to the 20% excise duty that banks in Kenya charge on commissions and other fees related to crypto transactions.
Cryptocurrencies could thus allow the Kenyan state to fill its coffers. Nevertheless, will the tax burden set back the adoption of cryptocurrencies in the country? According to a report by Chainalysis published in September this year, Kenya would reach the 19th place in terms of cryptocurrency adoption.
Recently, the Kenyan central bank government did not mince words against cryptocurrencies, making its anti-crypto stance unambiguous. The hostility of the regulator towards cryptocurrencies does not prevent the country’s legislators from using them, for the benefit of public finances.
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