The Kenya Revenue Authority (KRA) is set to introduce a new tax system that will enable it to track cryptocurrency transactions in real-time. The system will integrate with crypto exchanges to capture details such as the date, time, type, and value of transactions.
Kenya has around four million crypto users, one of the highest in Africa. According to a 2023 report by Chainalysis, Nigeria leads the continent in raw transaction volume for cryptocurrency, followed by Kenya, Ghana, and South Africa. In 2022, crypto transactions in Kenya were valued at $18.6 billion (KES2.4 trillion). This surpassed the activities of some commercial banks. The KRA said it aims to grow its tax base by monitoring this expanding sector.
In 2023, an amendment to the Capital Markets Act proposed a capital gains tax on exchanges and an excise duty on crypto transactions. However, the bill is still under review by the National Assembly.
Currently, many crypto traders in Kenya use peer-to-peer (P2P) platforms. The KRA acknowledged that its outdated system has made it difficult to track and tax these transactions. It is expected that the new system will help the government impose taxes on digital assets.
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