The Capital Markets (Amendment) Bill 2022 will be amended by the Kenyan parliament to tax cryptocurrency transactions on all Kenyan exchanges.
The government claims that by broadening the domestic tax base, this will reduce borrowing from abroad.
Similar to the excise duty on bank transactions, the amendment will levy a 20% excise tax on all crypto transaction fees and taxes.
Also, if the bill passes, Kenyans who sell or use cryptocurrency will have to pay the Kenya Revenue Authority either income tax or capital gains tax.
“Where the digital currency is held for a period not exceeding 12 months, the laws relating to income tax shall apply or for a period exceeding 12 months, the laws relating to capital gains tax shall apply,” states the advertisement for the bill, which is sponsored by Mosop MP Abraham Kirwa.
The regulator requires information on the virtual currency’s value in Kenya shillings from anyone who owns or trades in it.Additionally, they are required to inform the Capital Markets Authority (CMA) of the type of virtual currency used, as well as the dates on which it was acquired and sold.
According to the parliament, “the changes to the Capital Market Act will encourage citizen participation in an equitable and decentralized financial system that uses smart contracts, connecting Kenyans to global markets.”
Per the bill, an individual exchanging computerized monetary standards should apply to the CMA for a permit in no less than a half year of the sanctioning.
The CMA will ensure that all digital currency transactions in Kenya are recorded in a centralized electronic register in order to shield Kenyans from the dangers of unregulated cryptocurrency trading.
The Capital Markets Act will be amended to include digital currency as a security, according to the bill.
Sidebar:According to a report released by the United Nations in June 2022, Kenya has the highest population of cryptocurrency users in Africa.
Regardless, because of the worldwide market’s deficiency of more than $2 trillion this year, the country’s crypto market might reduce before long.