Kenyan lawmakers are considering a 3 percent tax on the transfer of cryptocurrencies and non-fungible tokens, and a 15 percent tax on online monetized content, under a newly introduced bill.
The Finance Bill 2023, presented to the Kenyan Parliament on May 4, will impose a digital asset tax on “income from the transfer or exchange of digital assets,” and also includes specific language for NFTs.
The bill will go through five rounds of readings, committees and reports in the National Assembly; if passed, it will go to the president for final approval into law. Cryptocurrency exchanges or those initiating transfers of cryptocurrencies or NFTs will be required to collect taxes and must deduct 3% of the value of the transfer to pay the government. Exchanges that are not registered in Kenya must register under the tax regime. The bill also seeks to tax "digital content monetization," a 15 percent tax on content creators paid to Promote and advertise products and services online, including but not limited to sponsorships, affiliate marketing, merchandise and paid subscriptions.
The digital assets portion of the bill has had mixed reactions online. Cryptocurrency Kenya, a Kenyan crypto advocacy group, tweeted that such a digital tax “must apply to all digital,” claiming that taxing crypto alone is “targeted harassment.” It al so noted that the tax is higher compared to the fees charged by the exchange, comparing the government's proposed 3% tax to Binance's 0.10% transaction fee. Kenya made its first effort to regulate cryptocurrencies in November, amending its capital markets law to require re people who own or trade cryptocurrencies to report information about their activities to authorities.
Kenya ranks among the top 20 when it comes to cryptocurrency adoption. A September report by blockchain analytics firm Chainalysis ranked the country 19th in terms of adoption of crypto.
