Kenya’s lawmakers are considering the introduction of a 3% tax on cryptocurrency transfers and non-fungible tokens (NFTs), as well as a 15% tax on monetized online content, according to a newly introduced Finance Bill. The bill will undergo several readings, committees, and review reports before being passed to the president for his final assent into law. The proposal for these new taxes has prompted a mix of reactions online, with people expressing both positive and negative sentiments.
In the event that the bill becomes law, it will require crypto exchanges, or those who initiate the transfer of crypto or NFTs, to collect and pay the tax to the government. This would mean deducting 3% of the transfers’ value, with non-Kenyan exchanges needing to register under the country’s tax regime. Additionally, the bill seeks to levy a 15% tax on digital content monetization, which would affect content creators who are paid to promote and advertise products and services online.
Some have welcomed the new tax proposal, as it suggests that cryptocurrencies and NFTs are now officially recognized in Kenya. The Central Bank of Kenya previously issued warnings against using crypto, but there were no outright prohibitions in place. However, others have expressed concern about the new taxes, arguing that they amount to targeted harassment or are simply unreasonable.
For example, Kenyan research and markets analyst Rufas Kamau called the 3% tax on cryptocurrency transactions “a joke” and questioned whether it would apply to loyalty points earned in supermarkets and from credit card usage. This skepticism highlights the need for clarity and specificity when it comes to imposing taxes on digital assets and transactions.
On the other hand, Kenyan crypto advocacy group Cryptocurrency Kenya argued that a digital tax, if implemented, must apply to “everything digital,” claiming that a tax focused only on crypto transactions is essentially targeted harassment. The group also pointed out that the proposed 3% tax is higher than the fees charged by crypto exchanges, highlighting the disparity between government taxation and industry standards.
Kenya first attempted to regulate cryptocurrencies in November by amending its capital market laws, requiring crypto owners and dealers to report their activities to the authorities. Today, Kenya ranks as the 19th country in terms of cryptocurrency adoption, according to blockchain analytics firm Chainalysis.
Overall, the possible introduction of taxes on cryptocurrency transactions and NFTs has generated diverse views among the online community in Kenya. While the official recognition of crypto assets and NFTs may be seen as a positive development, it’s clear that the potential impact of these new taxes is a contentious subject among stakeholders.
Source: Cointelegraph
