There are more than 4 million cryptocurrency holders in Kenya, and they have lost a lot of money with the bear market. For the authorities of the country, it is more than ever a question of regulating the crypto sector. Lawmakers then proposed a series of rules on the crypto markets.
KRA wants to tax crypto trading
The Kenya Revenue Authority (KRA) has decided to focus more on crypto regulation. To do this, it is proposing several changes in the Capital Markets Bill 2022. Among these, there is taxation of transactions related to digital assets. The KRA also plans to tax crypto wallets. The changes are pending approval by MPs in Kenya.
The taxation provided by the KRA is similar to what is done with the excise duties which are levied on bank transactions. It should be noted that banking establishments levy 20% excise duty on each of the commissions invoiced per transaction. They do the same with regard to all fees charged on transactions.
Also, people who have made crypto trading a business will pay income tax on their earnings. The bill states:Where the digital currency is held for a period not exceeding twelve months, income tax laws apply or for a period exceeding twelve months, capital gains tax laws apply. apply“.
If the changes receive the approval of MPs, crypto holders in Kenya will pay capital gains to the KRA. Payments will be made each time investors use cryptocurrency in a transaction.
Provide specific information for tax purposes
The bill stipulates that crypto holders and traders will have to provide certain types of information to the authorities. This is the Capital Markets Authority (CMA) who will receive this data and who will use it for tax purposes.
The information to be provided relates to the amount of cryptocurrency in Kenyan shillings. They also concern the type of digital asset concerned as well as the dates of acquisition and sale of the latter.
Almost six months ago, the United States published a report indicating that the majority of the population of Kenya owns cryptocurrencies. The document clarified that the country has a significant exposure to the collapse of the crypto markets. Now the Kenyan government wants to regulate the sector to protect investors.
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