With 8.5% of its population now owning cryptocurrencies, Kenya is reportedly considering taxing crypto exchanges, digital wallets and transactions.
Legislators in the African country are now considering the Capital Markets (Amendment) Bill, 2022 that would change the country’s laws and regulate and tax the digital currency trade, Business Daily reported Monday (Nov. 21).
If the bill is approved, Kenya Revenue Authority (KRA) would collect on capital gains for the increased market value of crypto when it is sold or used in a transaction and would likely collect income tax on the earnings of those who are in the business of trading crypto, according to the report.
The bill will require people who own or deal in digital currency to provide regulators with information about the value of the assets in Kenya shillings as well as the type of virtual currency used in transactions, the date on which it was acquired and the data on which it was sold, the report said.
The bill is being considered at a time when 4.25 million Kenyans own crypto and when the sector is not regulated in the country, according to the report.
“The amendment will also outline responsibilities of persons or businesses trading in digital currencies, provide for its taxation, ownership and provide for promotion of innovation in this area,” the bill’s sponsor, Mosop MP Abraham Kirwa, said.
As PYMNTS reported last month, Kenya is one of three African countries in the top 30 in Chainalysis’ Global Crypto Adoption Index. Kenya is ranked No. 9 on this list, Nigeria, No. 11 and South Africa, No. 30.
Cryptocurrency has penetrated into everyday commercial transactions, with individual transfers making up 95% of all transfers in sub-Saharan Africa. Among those, 80% of the transactions are valued under $1,000.
For all PYMNTS crypto and EMEA coverage, subscribe to the daily Crypto and EMEA newsletters.