Kenyan Parliamentary Committee Advances Bill For Crypto Asset Regulation And Taxation
The proposed framework outlines capital gains taxation when Kenyans sell or utilize cryptocurrencies in transactions.
By Anna B Kiwanuka
Kenya’s move towards regulating cryptocurrencies took a significant step as a bill categorizing crypto assets as securities and introducing capital gains tax on them passed a crucial stage in a parliamentary committee. The Capital Markets (Amendment) Bill, 2023, has received approval from the National Assembly’s Finance and National Planning Committee and is set for introduction in the lower chamber of parliament.
Chairman of the Committee, Kimani Kuria, emphasized the bill’s importance in safeguarding the country against financial crimes and terrorism financing. He highlighted the urgency, stating, “Cryptocurrencies are already being traded by millions of Kenyans yet we have no law to govern it. We approve this Bill for publication.”
Following the Committee’s endorsement, the bill progresses to the National Assembly for reading and deliberation. If enacted, the Capital Markets (Amendment) Bill, 2023, would bring changes to the tax code, enforcing taxes on crypto assets held in exchanges and digital wallets. The proposed framework outlines capital gains taxation when Kenyans sell or utilize cryptocurrencies in transactions. Specific details of the bill remain undisclosed, but reports indicate that banks might be required to levy a 20 percent excise duty on transaction fees and commissions.
Under the prospective law, Kenyan citizens would be mandated to declare their crypto assets and their corresponding values in Kenyan shillings to the Kenya Revenue Authority. An excerpt from the bill specifies, “A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the amount of proceeds from the transaction, any costs related to the transaction, and the amount of any gain or loss on the transaction.”
While Kenya prepares to implement crypto-related taxes, tax authorities in various nations have intensified efforts to track undeclared crypto assets. Notably, the UK’s tax service, HM Revenue and Customs, has recently demanded disclosures of undeclared crypto holdings spanning several years.