A bill, dubbed Capital Markets (Amendment) Bill 2022, which aims to introduce taxation of crypto exchanges, digital wallets and impose transaction taxes similar to excise duties levied on banking transactions, has been proposed by a Kenyan Member of Parliament (MP).
The proposed Amendment Bill allows the Kenya Revenue Authority (KRA) to go after Kenyans who own cryptocurrencies in a bid to impose taxation on their crypto holdings.
The Capital Markets (Amendment) Bill 2022 seeks to introduce taxation of crypto exchanges and digital wallets and imposes transaction taxes similar to excise duties levied on banking transactions. @CMAKenya pic.twitter.com/tecTHHOBm5
—BitKE (@BitcoinKE) November 21, 2022
The bill marks the first time that Kenya will mainstream cryptocurrencies and expand regulations to capture digital currencies.
The bill proposes a capital gains tax for the increase in market value of crypto upon sale or use in a transaction. Currently, banks are required to deduct 20% excise duty on all commissions and fees charged on transactions.
Here are more details on the bill so far:
- The bill requires persons who own or trade in digital currency to provide the Capital Markets Authority of Kenya (CMA Kenya) with specific information for tax purposes.
- Those who own or trade in digital currency will be required to provide the regulator with information regarding the amount of virtual currency in Kenyan shillings (KES), type of currency traded, date of purchase and date of sale.
- A person who trades digital currencies must keep records of digital currency transactions, including purchases and sales, pay taxes on gains made on digital currency transactions in accordance with applicable laws.
- A person who owns or trades in digital currency must provide the Authority with the following information for tax purposes – the amount of the proceeds of the transaction, all costs related to the transaction and the amount of any gain or loss on the transaction
- The amendment will provide specific provisions to govern digital currency transactions in Kenya, including the definition of digital currencies, its creation through crypto mining, and will provide regulations regarding the trading of digital currencies.
- The amendment will outline the responsibilities of individuals or companies trading digital currencies, provide for its taxation, ownership, and promote innovation in this area.
- Within six months of the enactment, a person who trades digital currencies must apply to the Authority for a license
- The CMA will ensure that Kenya has a centralized electronic record of all digital currency transactions
- Bill aims to protect Kenyans from risks associated with unregulated cryptocurrency trading
- It aims to amend the Capital Markets Act to include a digital currency in the definition of securities
- The CMA will have the power to issue a license to individuals who trade in digital currencies
follow us on Twitter for the latest posts and updates
Join and interact with our Telegram community