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HomeWealthMP Proposes Bill Seeking Regulation, Taxation Of Cryptocurrencies

MP Proposes Bill Seeking Regulation, Taxation Of Cryptocurrencies

The Kenya Revenue Authority (KRA) will go after cryptocurrencies users if a bill aimed at regulating and taxing the digital currency trade is approved.

Members of Parliament (MPs) are reviewing the Capital Markets (Amendment) Bill, 2022 which seeks to introduce taxation of cryptocurrency in Kenya.

If the bill is approved, this means that over four million Kenyans who own cryptos will be forced to pay KRA capital gains when they sell or use the digital currencies in a transaction.

“Where the digital currency is held for a period not exceeding twelve months, the laws relating to income tax shall apply or for a period exceeding twelve months, the laws relating to capital gains tax shall apply,” Mosop MP Abraham Kirwa who sponsored the bill said.

If approved, an owner or someone who deals with digital currency will be required to provide the Capital Markets Authority (CMA) with specific information for tax purposes.

Also, they will be required to submit information regarding the amount of the digital currency in Kenya shillings to KRA.

Kenyans dealing with cryptos will also be required to inform CMA of the type of currency transacted in, the date it was acquired and the date the currency was sold.

“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,” the Bill states.

In July this year, Kenya was ranked fifth in the world’s cryptocurrency ownership by the United Nations Conference on Trade and Development (UNCTAD).

The report showed that 8.5 percent of the country’s population own digital currencies.

Notably, Kenya was ranked ahead of developed countries like the United States which was ranked sixth with 8.3 percent, as well as the United Kingdom at 5 percent.

South Africa and Nigeria were ranked behind Kenya at 7.1% and 6.3% respectively.

“The cryptocurrency ecosystem expanded by 2,300 per cent between September 2019 and June 2021, particularly in developing countries

“The use of cryptocurrencies was an attractive channel, in terms of price and speed, through which to send remittances,” read the report in part.