A New Bill in Kenya Defines Crypto Assets as Securities and Imposes Taxes
A bill has been approved by the National Assembly’s Finance and National Planning Committee in Kenya, which defines crypto assets as securities and imposes capital gains tax on them. The bill will now be introduced to the lower chamber of parliament for further consideration. According to the Chairman of the Committee, Kimani Kuria, this law is crucial to combatting proceeds of crime and terrorism financing. Currently, there are no laws governing cryptocurrencies in Kenya.
The Capital Markets (Amendment) Bill, 2023
The Capital Markets (Amendment) Bill, 2023 aims to amend the country’s tax code by imposing taxes on crypto assets held on exchanges and digital wallets. Under this framework, Kenyans will need to pay capital gains tax when they sell or use their crypto assets. The bill also states that banks will deduct a 20% excise duty on commissions and fees charged on transactions. If passed, Kenyan citizens will be required to declare all their crypto assets and their value to the Kenya Revenue Authority.
Other Countries’ Approach to Crypto Taxes
While Kenya is still in the process of implementing its crypto taxes, other countries’ tax services have been actively pursuing individuals who have not accurately declared their crypto holdings. For example, the United Kingdom’s His Majesty’s Revenue and Customs recently demanded that crypto holders declare any unreported holdings from the past four, six, or even 20 years.
Hot Take: Kenya Takes Steps Towards Regulating Crypto
Kenya’s approval of a bill defining crypto assets as securities and imposing taxes on them is a significant step towards regulating cryptocurrencies in the country. This move aims to combat illegal activities such as money laundering and terrorism financing while ensuring that individuals accurately report their crypto holdings. As more countries explore the taxation of cryptocurrencies, it is crucial for crypto holders to stay informed about their tax obligations and comply with the regulations in their respective jurisdictions.
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