Kenya Proposes 3% Tax On Digital Assets
Milestone Date: May 4, 2023
Kenya's Finance Ministry is proposing a 3% tax on cryptocurrency transfers and digital assets as part of its 2023-2024 budget plan, as other sources of funding are proving to be expensive or not accessible. This move is an attempt to increase revenue collection by the East African nation, which will see a 14% increase in revenue in the coming fiscal year if this proposal is accepted in June.
This move is part of Kenya's wider plan to increase tax revenue by $21 billion in the coming fiscal year. Other proposed measures include increased taxes on betting, rental income, and fuel.
The proposed tax is still subject to approval by Kenya's parliament; but if it’s passed, it could have significant implications for the country's crypto industry. As with any new tax, it will be important for policymakers to strike a balance between raising revenue and encouraging growth and investment in the sector. Nikhil Hira, partner at Nairobi-based advisory firm Kody Africa, stated, “This will put further burden on Kenyans, who are already facing difficult times with the high inflation rate impacting the cost of living. With increased taxation and other levies, disposable income is going to reduce for the majority of the population.”
By Elizabeth Morrison
Published:May 4, 2023