Kenya plans to cut its digital asset tax in half, aiming to boost crypto innovation and attract global fintech investors.
Kenya’s National Treasury is proposing to slash the digital asset transaction tax from 3% to 1.5% under the Finance Bill 2025, responding to widespread criticism that the current rate chokes innovation and drives away investors.
What’s Changing
1. Tax applies to digital assets like cryptocurrencies and NFTs.
2. New rate would reduce fees on gross fair market value of transactions.
3. The measure amends the Third Schedule of the Income Tax Act.
Why It Matters
1. Kenya ranks #5 globally for peer-to-peer crypto activity (Chainalysis, 2024).
2. The 3% tax, introduced in 2023, is seen as regressive and innovation-stifling.
3. Lowering the rate aims to align with global standards and ease entry for startups and investors.
Broader Context
1. The Treasury envisions a balanced framework that still generates revenue while positioning Kenya as an African fintech leader.
2. The Blockchain Association of Kenya supports the proposal, predicting better compliance and platform formalisation.
Regional Trends
1. Kenya’s shift mirrors moves in Nigeria and South Africa, where regulators are mixing oversight with innovation-friendly policies.
2. South Africa’s tax authority, SARS, recently warned crypto traders to register or face enforcement.
If passed, the Finance Bill 2025 could redefine Kenya’s crypto landscape and signal a friendlier frontier for digital asset innovation in Africa.
Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.
