Key takeaways:
- A bill that would classify cryptocurrency assets as securities and tax capital gains on them has passed a committee in the Kenyan parliament.
- Following the Committee’s approval, the measure will move on to the National Assembly, Kenya’s lower house of parliament, for reading.
A bill that would classify cryptocurrency assets as securities and tax capital gains on them has passed a committee in the Kenyan parliament. Next, it will be presented to the lower house of parliament.
The Capital Markets (Amendment) Bill, 2023, has reportedly been approved by the National Assembly’s Finance and National Planning Committee, according to a report published in the Kenyan publication Business Daily on December 4. The Committee Chairman, Kimani Kuria, is quoted in the report as follows:
“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.”
Following the Committee’s approval, the measure will move on to the National Assembly, Kenya’s lower house of parliament, for reading.
The country’s tax code is amended by the Capital Markets (Amendment) Bill, 2023, which levies taxes on cryptocurrency assets kept in digital wallets and on cryptocurrency exchanges. Under its framework, when Kenyans sell or use cryptocurrency in a transaction, they will have to pay capital gains on the increase in value on the market.
Banks will deduct 20 percent excise duty on all commissions and fees made on transactions, although the complete language of the Bill is not accessible yet, according to the Business Daily.
In the event that the law is approved, Kenyan nationals would have to notify the Kenya Revenue Authority of all of their cryptocurrency holdings and their worth in Kenyan shillings. Part of the Bill is cited in the report:
“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.”
Kenya is just getting ready to implement cryptocurrency taxes, but tax authorities in other nations have recently made it clear that they want to go after anyone who hasn’t accurately declared their cryptocurrency holdings.
The Criminal Investigation (CI) Unit of the Internal Revenue Service (IRS) has reported an increase in the frequency of investigations related to digital asset reporting. In particular, the IRS began requiring US taxpayers to report transactions involving digital assets in 2019.
