Kenyan law taxes crypto protects consumers
Rebeca Moen Nov 22, 2022 04:49
Kenyans who possess or trade in cryptocurrencies must report their activity to the government for tax reasons. Cryptocurrency kept for less than a year is subject to income tax, while capital gains tax applies after that. Kenya levies an income tax ranging from 10% to 30%. Banks currently levy a 20% excise tax on all cryptocurrency commissions and fees.
The Capital Markets Law of Kenya was subject to a potential modification that was suggested on November 21. If this amendment were to become law, private individuals who own cryptocurrencies or participate in the trading of cryptocurrencies would be required to provide the Capital Markets Authority of Kenya with information regarding their activities for the purpose of determining how much tax should be collected from those activities.
To our knowledge, this is the first time that cryptocurrencies have been incorporated in any of Kenya's financial regulatory system.
According to the Capital Markets (Amendment) Bill, Kenyans would be obligated to declare and pay capital gains taxes to the Kenyan Revenue Authority if they sell or purchase digital currencies. This obligation is detailed in the legislation.
Any cryptocurrency that is held for more than a year will be subject to capital gains tax, while any cryptocurrency that is held for less than a year would be subject to income tax on its value.
In Kenya, there is a graduated tax on income that ranges from 10 percent all the way up to 30 percent.
A centralized electronic record of all transactions involving digital currencies throughout the country would be created as a result of the bill, which would also make it possible for individual crypto dealers to register with the government. Additionally, it would recognize digital currencies as being securities.
Kenya is rated number 19 in the world for the amount of persons that use cryptocurrencies, and it is ranked number 5 for trading amongst peers, according to a survey that was done by Chainalysis and released in September.
At the same time as Kenyan President William Ruto is making a request to broaden the country's income base, the possibility of making the move that is now being discussed is being studied.
It is estimated that around 4 million individuals in this country make use of various cryptocurrencies.
Due to the fact that approximately 8.5% of the population lives in privately owned homes, Kenya now has the fifth highest rate of property ownership in the world.
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