Kenya and its first collection of taxes on cryptocurrencies
Kenya’s economy is taking a bold step into the future with its first crypto tax collection. On Taxpayers’ Day on November 1, the Kenya Revenue Authority (KRA) announced that it had collected $77.5 million in taxes from cryptocurrency transactions for the 2023-2024 fiscal year. These revenues, from 384 local traders, constitute a first for the country, which thus sees crypto-assets becoming integrated into the national economic fabric.
KRA President Anthony Mwaura highlighted the importance of this first contribution and expressed the country’s ambitions: to reach $465 million in tax revenue from the crypto sector over a five-year period. To achieve this, the KRA plans to collaborate closely with the central bank and key crypto market players in Kenya.
However, Mwaura identified several challenges, including the lack of effective mechanisms to reach all crypto stakeholders. Although many participants are willing to comply with tax requirements, the lack of identification tools remains a major barrier. To overcome this problem, the KRA is seeking to further engage the sector and develop solutions to facilitate tax collection.
To go further: Crypto Africa: Telegram, driving the adoption of digital assets on the continent
A booming crypto economy
With around four million cryptocurrency users, Kenya ranks among the leaders in Africa in terms of crypto adoption. This popularity makes the sector a strategic lever for expanding the country’s tax base. In 2022, crypto transactions reached approximately $18.6 billion, a volume that rivals that of several large local financial institutions, highlighting the economic potential of this new form of finance.
According to Chainalysis: Cryptocurrencies meet diverse needs for Kenyans, providing a solution for preserving savings, facilitating commercial transactions for the purchase of goods and services, and simplifying the sending and receiving of funds to and from abroad, notably Europe and the United States. This dynamic highlights the growing role of crypto in the daily lives of Kenyans, who are exploring alternatives to traditional financial systems.
To capture this economic value, the Kenyan government is strengthening its regulatory and taxation efforts. The Kenya Revenue Authority (KRA) has thus introduced a real-time monitoring system, making it possible to integrate crypto exchanges into the national tax framework. This approach aims to ensure that the rise of crypto in Kenya contributes significantly to the country’s formal economy, while providing a compliance framework for users and operators in the sector.
To go further: Crypto Africa: Blockchain financing on the continent remains strong despite turbulence
Moral of the story: in Kenya, when crypto flows freely, the State takes out the tax net!
Disclaimer
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