Kenyan law establishes crypto-taxation and creates protections for consumers

The country's first crypto regulatory effort amends its Capital Markets Act to define crypto as security and establish reporting, tax and other requirements. New

An amendment was introduced to Kenya's Capital Markets Act on November 21 that would require those who own or trade cryptocurrencies to provide the country's Capital Markets Authority with information about their activities to tax purposes, local media reported. This is the first time that Kenya has extended financial regulation to cryptocurrency.

Under the Capital Markets (Amendment) Bill, Kenyans would pay capital gains tax to the Kenya Revenue Authority when selling or using digital currencies. Cryptocurrency held for less than a year would be subject to income tax, while after that capital gains tax would apply. Kenya has an income tax which varies from 10% to 30%. Banks already charge a 20% excise duty on all commissions and fees related to crypto transactions.

The Kenya Revenue Authority (KRA) will prosecute the over 4 million Kenyans who own #crypto, if MPs approve changes to the Capital Markets Bill ( Amendment), 2022, to regulate and tax the growing digital currency trade. pic.twitter.com/LRlAgPJucJ

The sponsor of the bill, MP Abraham Kirwa, said:

“The amendment will provide […] the definition of digital currencies, their creation through crypto mining and will provide regulations regarding the trading of digital currencies. […] The amendment will also outline the responsibilities of individuals or businesses that trade digital currencies, provide for its taxation, ownership and promote innovation in this area."

The bill would define digital currencies as securities, provide for the licensing of individual crypto traders, and create a centralized electronic record of digital currency transactions in the...