Kenya is mulling whether it should bring the crypto sector under a tax regime or not. A law is awaiting approval in Kenya, that would give crypto assets a nod of legalisation as tradeable assets. The name of this draft law is the Capital Markets (Amendment) Bill, 2022. As per a report from the United Nations, roughly 8.5 percent of the Kenyan population, making up for 4.25 million people in that country, own crypto assets. If and when the law gets approved, it would require investors to pay capital gains tax to the Kenya Revenue Authority. Kenyan banks would deduct a 20 percent excise duty on crypto transactions.
Investors will also be mandated to disclose details on their crypto ownership to the government financial regulator, called the Capital Markets Authority.
Ministry of Finance has got a huge incentive to high jack the Private member’s bill that seeks to amend the Capital Markets Authority Act that was tabled last week. Now that the Kenya Gov’t has tabled it’s own version of the CMA law to tax crypto transactions! @binance @BinusuX pic.twitter.com/ObfDZDpoPI
— Louis N. Kizito (@LouisNkizito) November 21, 2022
“The amendment will provide for specific provisions to govern digital currency transactions in Kenya, including the definition of digital currencies, its creation through crypto mining and provide for regulations around trading of digital currencies,” a CoinDesk report quoted the bill sponsor, Mosop MP Abraham Kirwa as saying.
Due to the lack of rules governing the crypto sector, Kenya became a hotspot for swarming crypto scammers.
In 2021, crypto scammers reportedly looted Kenyans of as much as $120 million (roughly Rs. 915 crore). The statistics were disclosed by Kenyan Cabinet Secretary Joe Mucheru while he was speaking at a conference back in March.
The minister, at the time, had urged people to keep flagging fake or suspicious entities so that others are alerted on time.
The crypto market in Nigeria, Kenya, Tanzania, and South Africa together saw a growth of 1,200 percent, reaching a market valuation of $105.6 billion (roughly Rs. 775 crores) in one year, a report by Chainalysis claimed in September last year.
In the backdrop of this accelerating growth trajectory, crypto players from around the world are flocking towards the African continent. In October, Coinbase-backed Mara Digital Wallet service in Kenya as well as Nigeria.