If MPs pass amendments to the Capital Markets (Amendment) Bill, 2022, aimed at regulating and taxing the rapidly expanding digital currency trade, the Kenya revenue authority would pursue the more than four million Kenyans who possess cryptocurrency.
If the Bill is enacted, traders will be required to pay the KRA capital gains on the increased market value of the cryptocurrency when they sell or use it in a transaction.
Kenyans who have made trading in cryptocurrencies a business are likely to be liable for income tax on their earnings.
“Where the digital currency is held for a period not exceeding twelve months, the laws relating to income tax shall apply or for a period exceeding twelve months, the laws relating to capital gains tax shall apply,” the Bill, sponsored by Mosop MP Abraham Kirwa, says.
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Even in the industrialized world, the sector is mainly unregulated and not controlled at all in the nation.
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The value of the digital assets owned by Kenyans, who are largely tech-literate, is difficult to estimate, but it may be in the billions of shillings.
“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.
In Kenya, this would be the first time that cryptocurrency transactions would be regulated and brought to the public.
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