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Kenya’s legislative landscape is set to undergo a significant transformation with introducing a bill targeting the regulation and taxation of cryptocurrencies. The Capital Markets (Amendment) Bill, 2023, having secured approval from the National Assembly’s Finance and National Planning Committee, is now on its way to the National Assembly for further deliberation.
Kenya Moves to Regulate Cryptocurrency
The Capital Markets (Amendment) Bill, of 2023, represents a pioneering step for Kenya in the realm of digital currency regulation. This bill, once enacted, will categorize crypto assets as securities. It introduces a framework for the imposition of capital gains tax on cryptocurrencies stored in both digital wallets and crypto exchanges. The move is seen as a crucial step to provide legal clarity and safeguard the economy from potential financial crimes associated with digital currencies.
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Kimani Kuria, Chairman of the National Assembly’s Finance and National Planning Committee, highlighted the bill’s significance. He stated, “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 them. We approve this Bill for publication.”
Draft Bill Seeks Crypto Transaction Transparency
Under the proposed legislation, Kenyans will be required to pay capital gains tax on the increased market value of their crypto assets at the time of sale or transaction. The bill aims to integrate cryptocurrencies into the existing tax framework, mandating that all crypto transactions be declared in Kenyan shillings to the Kenya Revenue Authority.
The draft bill stipulates, “A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the amount of proceeds from the transaction, any costs related to the transaction, and the amount of any gain or loss on the transaction.” Additionally, banks will be obliged to deduct a 20 percent excise duty on all commissions and fees charged on crypto transactions.
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Kenya’s initiative comes at a time when global tax authorities are increasingly focusing on the cryptocurrency sector. In the United Kingdom, for instance, His Majesty’s Revenue and Customs has been actively pursuing undeclared crypto assets, demanding disclosures of crypto holdings spanning up to 20 years.
The bill’s introduction to the National Assembly marks a critical juncture in Kenya’s approach to digital currency regulation. As the bill progresses through the legislative process, it is expected to set a precedent for other nations in the region and beyond. This legislative effort places Kenya at the forefront of addressing the challenges and opportunities presented by the rapidly evolving digital currency market.
Read Also: BitMEX Announces Terra Classic (LUNC) Perpetual Contract Listing After USTC
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- Source: https://coingape.com/kenya-advances-bill-for-crypto-asset-regulation-and-taxation/
