Kenya’s first attempt at crypto regulation amends its Capital Markets Law to define crypto as a security and establish reporting, tax, and other requirements. It also creates consumer protections.
On November 21, an amendment to the Kenyan Capital Markets Law was made that would require cryptocurrency owners and dealers to report their activities to the Capital Markets Authority for tax purposes.
Kenya has never before included cryptocurrency in its financial regulations.
When Kenyans sell or use digital currencies, they would be required to pay capital gains taxes to the Kenyan Revenue Authority under the Capital Markets (Amendment) Bill. Income taxes would apply to cryptocurrency held for less than one year, while capital gains taxes would apply after that. The income tax in Kenya is between 10% and 30%.All crypto trade commissions and fees currently attract a 20% excise duty from banks.
Member of Parliament Abraham Kirwa, the bill’s author, stated:
“The amendment will define digital currencies, how they are created through crypto mining, and regulations for trading digital currencies.”Additionally, the amendment will outline the responsibilities of individuals or businesses trading in digital currencies, regulate ownership, taxation, and innovation in this area.
The bill would establish a centralized electronic register of digital currency transactions in the country, define digital currencies as securities, and allow for the licensing of individual crypto traders. Additionally, it would establish privacy guarantees and a fund “to protect investors from financial loss arising from the failure of a licensed broker or dealer” as consumer protection measures.
Kenya ranked fifth in peer-to-peer trading and 19th globally in cryptocurrency adoption in a September Chainalysis survey. Kenyan President William Ruto has called for a double-digit increase in the country’s tax base at the same time as the amendment that is being proposed. About 4 million people in the nation use cryptocurrencies. At around 8.5% of the populace, that provides Kenya with the world’s fifth-most noteworthy pace of possession.
