Kenya is advancing crypto regulation with the Virtual Asset Service Providers (VASP) Bill, aiming to combat money laundering and terrorism financing. This effort aligns with Kenya’s goal of exiting the Financial Action Task Force (FATF) grey list, which flags weak financial oversight.
However, stakeholders, including the Virtual Asset Consultative Council (VACC), have raised concerns over the proposed Digital Assets Tax (DAT) under Section 12F of the Income Tax Act.
Critics argue that the bill does not differentiate between long-term holders and active traders, leading to potentially unfair taxation. Additionally, the lack of clarity on taxable events, such as transfers between personal wallets, could create compliance challenges.
Given crypto’s unique nature, experts urge adjustments to the taxation model to ensure fair and effective regulation that supports Kenya’s digital asset ecosystem.
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