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Kenya Lawmakers Introduce Changes to Address Cryptocurrency Taxation

Kenya National Assembly’s Finance and National Planning Committee has approved a bill allowing the taxation of over four million Kenyans who are thought to be cryptocurrency traders.

The committee has approved the publication of the Capital Markets (Amendment) Bill, 2023 sponsored by Mosop MP Abraham Kirwa.

This indicates that the Bill will move on to the second reading when members of Congress will discuss it and offer changes at the third reading before sending it to the President for assent.

The committee led by Molo MP Kimani Kuria has given its approval to Mr. Kirwa’s request to modify the Capital Markets Act, Cap 485 so that digital currencies are now considered securities.

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.

Kimani Kuria, Chair National Assembly’s Finance and National Planning Committee

Under the Capital Markets (Amendment) Bill, 2023, cryptocurrency exchanges and digital wallets would be subject to transaction taxes, which would be similar to the excise duty applied to bank transactions. Banks deduct an excise duty of twenty percent from all commissions and transaction costs.

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If the Bill is enacted, Kenyans will have to pay the Kenya Revenue Authority (KRA) capital gains for the increase in the cryptocurrency’s market value when they sell it or use it in a transaction.

The improvements, according to Mr. Kirwa, will guarantee that citizens are not exposed to a variety of threats and provide for governance and oversight in the rapidly expanding area.

The proposed amendment lays out comprehensive regulations to control the establishment, ownership, trading, taxes, and innovation promotion of digital currencies in Kenya. It also includes provisions for regulating their transactions and regulating their creation through cryptocurrency mining.

Cryptocurrency is the future. This will be the norm because we will buy and sell using cryptocurrencies. It just takes seconds to transfer a million dollars and nobody is seeing the transaction.

We should be on the frontline in adopting cryptocurrencies like we did with the M-Pesa [Safaricom’s money transfer service]. Right now South Africa and Nigeria have legalised cryptocurrencies, yet our Central Bank is dragging its feet. We need to protect our traders from potential losses.

Abraham Kirwa, MP Mosop

The Bill mandates that those who deal with or own digital currencies give specific information to the Capital Markets Authority (CMA) so that it can be taxed.

Information about the amount of virtual currency in Kenyan Shillings must be provided to the regulator by anyone who owns or deals in virtual currency. Cryptocurrency Taxation Kenya

Additionally, they must notify the CMA of the kind of virtual currency that was transacted in, as well as the dates when it was bought and sold.

Source: Business Daily

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