Key Insights
- Kenya progresses bill designating crypto as securities and mandating capital gains taxes
- Private member legislation approved by parliamentary finance committee
- Seeks to impose oversight on Kenya’s large crypto trading ecosystem
NAIROBI, Kenya — Kenya is progressing with plans to categorize cryptocurrencies as securities while enacting capital gains taxes on digital assets following the approval of a key bill by a parliamentary finance committee this week.
The Capital Markets Amendment Bill 2023 declares crypto assets like Bitcoin as investment securities. It also mandates Kenyan crypto users pay taxes on any profits from trading or transactions using digital currencies priced in the local shilling currency.
The private member bill from MP Joseph Kipkosgei now heads to the National Assembly seeking passage into law. If approved in parliament, the legislation requires locally-licensed crypto industry players to collect excise duties on trading fees while citizens must report crypto holdings annually.
Read also! Kenya to Launch Digital ID System in December After Two-Month Testing Period
Proponents argue imposing formal regulations and taxes on Kenya’s thriving crypto economy will curb illicit financial flows from trafficking of digital currencies. But crypto advocates warn overly stringent rules could derail innovation.
As Kenya moves towards legitimizing digital assets within its financial system, other governments like the UK aim to recover unpaid crypto-related taxes retroactively from holders failing previous disclosures. The era of crypto operating freely outside tax rules appears ending.