Friday, June 9, 2023

Kenya Proposes New Bill For Crypto And NFT Transaction Tax

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The Kenyan government is reportedly considering new tax measures affecting cryptocurrency transactions, online advertisement, and non-fungible token (NFT) transfers.

According to reports, the government is looking for new revenue streams to help finance its budget and is considering taxing these industries.

Kenya Enacts Bill On Crypto Taxes

The country’s lawmakers aim to impose a capital gains tax on profits made from cryptocurrency trading. As such, they will place a 3% tax on digital assets. This move attempts to regulate the sector and ensure cryptocurrency traders contribute to the country’s tax revenue.

The lawmakers are also considering imposing a tax on the transfer of NFTs. These digital assets represent ownership of unique artwork, music, and videos. According to them, NFT transfers will get a similar tax percentage rate of 3%.

Further, the lawmakers noted in the bill that they will place a 15% tax on online influencers, who have become a powerful force in the advertising industry. The proposed tax would be levied on income influencers generate through various social media platforms.

Also, some of the products and services included in the bill are affiliate marketing, sponsorships, paid subscriptions, and merchandise.

The crypto market is on an uptrend today l Source:

In the meantime, the government is yet to pass the bill into law. Notably, it will have to go through different assessment sessions, including five reading rounds, reports, and committees, by the National Assembly. Finally, it will eventually move to the president’s table for final assessment and consideration before it becomes law. 

Nevertheless, the Kenyan government’s move to place new tax measures on these industries has attracted several reactions online. 

Individuals Address The Move Of The New Bill

There have been several thoughts regarding the lawmaker’s move to create new tax measures encompassing virtual asset industries. 

Kenya markets and research analyst Rufas Kamau addressed the move in a tweet on May 4, noting that the 3% tax on digital assets was a joke. He enquired whether or not it applies to credit card and supermarket loyalty points.

In another tweet, Kenya’s digital asset advocacy group, Cryptocurrency Kenya, stated that the digital tax must include everything digital. It also noted that applying it to only crypto is targeted harassment.

Related Reading: Bitcoin Gears Up For The Next Big Leap: $36,000 Within Reach – Matrixport Data

The group also cited the difference between the tax rate and the fees crypto exchanges charge on transactions. It used Binance’s charges of 0.10% and 0.50% as a scenario, noting that the tax rate of 3% is higher.

The Central Bank of Kenya has previously warned about using digital currencies. However, it never put any prohibitions in place. Nevertheless, crypto users and investors always recognize the risks of digital assets trading and exercise caution at all times.

Featured image from Pixabay and chart from Tradingview



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