An amendment to the Capital Markets Law has been introduced in the National Assembly and its adoption could see the Kenya Revenue Authority (KRA) begin to tax crypto users.
As proposed in the Capital Markets (Amendment) Bill 2022, anyone who transacts using digital currencies should be subject to taxation, with income tax and capital gains applicable as stipulated under the law.
If it passes, the legislation could see digital currencies held for less than a year attract income tax, while capital gains tax would apply when the taxpayer holds the crypto for more than a year.
The amendment also seeks to define digital currencies, including what happens with their trading and creation through mining. The bill’s sponsor, Abraham Kirwa, Member of Parliament for Mosop Constituency, said in a statement:
“The amendment will also outline responsibilities of persons or businesses trading in digital currencies, provide for its taxation, ownership and provide for promotion of innovation in this area.”
According to UN, Kenya is one of the countries with the fastest-growing adoption rates of cryptocurrencies, showing more than 4 million Kenyans own, use or trade crypto.