On November 21, the government of Kenya introduced changes to the Kenyan Capital Markets Law. The Kenyan government’s approach is to make sure that the taxation on cryptocurrencies is streamlined.
The amendments suggest that any individual or entity that is involved in dealing with or owning cryptocurrencies will be required to provide information on their activities.
The information for cryptocurrency ownership and dealing would be required for taxation purposes. The information is already public in Kenya through local media sources.
For the first time, the government of Kenya has decided to take a step in streamlining the taxation process in the country.
Kenya Government is Taking Interest in Crypto Taxation
The government was never interested or concerned about the involvement of their locals or entities in Kenya with cryptocurrencies.
This indicates that the government and regulators of Kenya have realized the importance of cryptocurrencies. They know how much revenue the crypto sector can generate to boost their economy.
Therefore, the country is now taking an interest and is determined to implement taxes on cryptocurrency activities.
The amendment details suggest that the people dealing in cryptocurrencies and generating capital gains would be liable to pay taxes. The Kenyan Revenue Authority will be responsible for the collection of taxes.
The regulator would ensure that the taxes are paid by the individuals and entities who are involved with crypto and are generating gains.
Whether it is owning (holding) the cryptocurrencies or selling them via trades, taxes would apply to the capital gains.
The income tax would also apply to individuals or businesses who keep held the cryptocurrencies for less than a year.
If the cryptocurrencies are held across the 1-year timeline, then the income tax will be removed but the capital gains tax will be implemented.
As of now, the ranges of income tax implementations in Kenya are between 10% and 30%. On the other hand, the banks are already charging a huge (20%) in the form of excise duty.
The excise duty is implemented on all kinds of fees and commissions that involve cryptocurrency trades.
New Amendment is Problematic for the Locals
Given the number of fees the locals were already paying to the banks, the Kenya authorities implementing income and capital gains taxes are going to be very cruel.
Kenya is among the countries where the locals have found cryptocurrencies to be a way to improve their lifestyles. However, the new taxes would simply bar the locals from doing that.
A great decline is expected in cryptocurrency ownership and trading volumes from Kenya, following the implementation of the new taxation laws.
As a result, all major cryptocurrencies may take a huge hit and push the cryptocurrencies into even darker territory.