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KRA Proposes Crypto Tax Collection; Kenya Moves Toward Regulation

Cryptocurrency Nov 22, 2022 04:00AM ET
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KRA Proposes Crypto Tax Collection; Kenya Moves Toward Regulation

  • KRA proposed to collect taxes from crypto transactions as a part of new regulations.
  • If the proposal is accepted by the Parliament, the Authority will start implementing the regulations.
  • The move is to minimize foreign borrowings by expanding domestic taxes.

The Kenya Revenue Authority (KRA) proposed to collect taxes from crypto transactions in all exchanges and expects MPs to approve the proposal of taxing and thereby regulating the “fast-growing digital currency trade,” marking the first time in the history of Kenya that it has brought strict regulations in crypto trade.

According to the Capital Market Amendment Bill, the Government of Kenya proposes to introduce a 20% excise tax on crypto exchanges and digital wallets, a move to expand domestic tax and thereby minimize foreign borrowing.

In addition, the crypto holders are required to provide relevant information regarding their crypto assets to the Capital Markets Authority (CMA) for tax collection purposes:

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.

As per the proposal, if the Bill is approved, Kenyans will pay the KRA capital gains for the increased market value of the crypto during the trade of digital currencies.

Abraham Kirwa, the Mosop MP said that the laws related to the income tax would be applied to a digital currency that is held for a period of fewer than twelve months and those relating to the capital gains would be applied to the cryptocurrencies held for more than twelve months.

Furthermore, he stated:

The amendment will provide for specific provisions to govern digital currency transactions in Kenya, including the definition of digital currencies, its creation through crypto mining, and provide for regulations around the trading of digital currencies.

Additionally, the amendment explains the responsibilities of crypto holders: “provide for its taxation, ownership and provide for the promotion of innovation in this area.”

The post KRA Proposes Crypto Tax Collection; Kenya Moves Toward Regulation appeared first on Coin Edition.

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KRA Proposes Crypto Tax Collection; Kenya Moves Toward Regulation
 

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