A bill defining crypto assets as securities and imposing capital gains tax on them has made it through a Kenyan parliamentary committee. It will be introduced to the lower chamber of parliament next.
According to the Kenyan newspaper Business Daily on Dec. 4, the Capital Markets (Amendment) Bill, 2023, has been approved by the National Assembly’s Finance and National Planning Committee. The report cites the Chairman of the Committee, Kimani Kuria:
“This is a very critical law that will guard our country against proceeds of crime and terrorism financing. Cryptocurrencies are already being traded by millions of Kenyans yet we have no law to govern it. We approve this Bill for publication.”
After the Committee’s approval, the bill will head to the reading stage in the National Assembly, the lower chamber of the Parliament of Kenya.
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The Capital Markets (Amendment) Bill, 2023, amends the country’s tax code, imposing taxes on crypto assets stored on crypto exchanges and digital wallets. In its framework, Kenyans will pay capital gains for the increased crypto market value when they sell or use it in a transaction. While the bill’s text is unavailable in full, according to the Business Daily, “banks [will] deduct 20 percent excise duty on all commissions and fees charged on transactions.”
Should the bill pass, citizens of Kenya would be obliged to declare all their crypto assets and their value in Kenyan shillings to the Kenya Revenue Authority. The report cites part of the bill:
“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.”
While Kenya is only preparing to introduce its crypto taxes, the tax services in other countries have recently been quite vocal in their desire to chase all those who didn’t declare their crypto accurately. For example, His Majesty’s Revenue and Customs recently demanded that United Kingdom hodlers declare any crypto they failed to report in the last four, six or even 20 years.
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