According to the Business Daily report on Monday, the Kenya Revenue Authority, also known as the KRA, would go after the more than four million residents of Kenya who possess cryptocurrencies, if members of parliament come out in favor of revisions to the legislation that would regulate and tax the rapidly expanding trade in digital currencies.
The bill states:
“A person who trades in digital currencies shall keep records of digital currency transactions, including purchases and sales, pay taxes on any gains that are made from transactions in digital currencies in accordance with the applicable laws.”
The Capital Markets (Amendment) Bill, 2022 aims to tax cryptocurrency exchanges and digital wallets, in addition to imposing transaction taxes comparable to the excise duty that is levied on financial institution transactions.
Investors in Kenya’s cryptocurrency market will be subject to capital gains tax from the Kenya Revenue Authority upon any sale or usage of their cryptocurrency. Investors would also be obligated to disclose their cryptocurrency holdings to the government’s financial regulator, the Capital Markets Authority, under the proposed legislation.
Mosop MP Abraham Kirwa, the bill sponsor asserts:
“The amendment will provide for specific provisions to govern digital currency transactions in Kenya, including the definition of digital currencies, its creation through crypto mining and provide for regulations around trading of digital currencies.”
Kenya Gradually Turns To Crypto
The bill was introduced about six months after a UN report revealed that Kenya had the highest percentage of its people holding cryptocurrencies in Africa, highlighting the country’s vulnerability to the current breakdown in the crypto market.
UN, the international agency tasked with maintaining peace and security, advised the government of Kenya and other developing nations to regulate cryptocurrencies thoroughly. With the rise in number of African people using cryptocurrencies, a report says that Kenya has the most crypto users on the continent, with 4.25 million people, or 8.5% of the population, saying they are crypto investors.