The Kenya Revenue Authority (KRA) plans to tax Kenyans who own cryptocurrency if MPs approve a bill tabled before them that changes the law aimed at regulating and taxing the fast-growing digital currency boom.
This is after a United Nations report showed that Kenya has the largest share of its population with cryptocurrencies in Africa.
In the Capital Markets (Amendment) Bill, 2022, the tax man will start taxing major cryptocurrency exchanges and digital wallets and also add transaction taxes.
This means Kenyans who want to use the crypto market will have to pay the KRA capital gains for the increased market value of the crypto when they sell or use their coins if the Bill is approved.
If you also make any type of profit from trading cryptocurrencies, KRA will also demand income tax on your earnings.
“Where the digital currency is held for a period not exceeding twelve months, the laws relating to income tax shall apply or for a period exceeding twelve months, the laws relating to capital gains tax shall apply,” the Bill, sponsored by Mosop MP Abraham Kirwa, says.
In order to use crypto, you will also have to provide the Capital Markets Authority (CMA) with specific information for tax purposes and to also reveal to the regulator information regarding the amount of the virtual currency you hold in Kenya shillings.
“A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the number of proceeds from the transaction, any costs related to the transaction, and the amount of any gain or loss on the transaction,” the Bill states.