Kenya to start taxing citizen trading on cryptocurrencies
The Kenya Revenue Authority (KRA) is seeking to introduce taxation on cryptocurrencies and digital wallets. Through the Capital Markets (Amendment) Bill, 2022, the tax collector aims to introduce income tax for digital currencies held for a period not exceeding twelve months and capital tax for those who have held digital currency for a period beyond twelve months.
This is the first time that the government is making an attempt at drawing revenue from more than 4 million Kenyans who hold cryptocurrencies. The Bill was sponsored in parliament by Mosop MP Abraham Kirwa.
“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.
According to a report produced by the United Nations six months ago, Kenya is leading in the number of people who hold cryptocurrencies in Africa. This makes the country a leader in the fast-growing cryptocurrency market.
The Central Bank of Kenya(CBK) has warned Kenyans about the volatility of the cryptocurrency market, highlighting the common wide fluctuations that hit the market from time to time. Recently, the fall of FTX, one of the leading crypto trading platforms led investors to lose huge amounts of money.