Kenya Amendments To The Capital Market Law To Enter Crypto Regulations

Kenya immediately made cryptocurrency regulations. (photo: twitter @NjerusUpdates)

JAKARTA - A new amendment to the law was introduced to Kenyan Capital Market Act on November 21 which would require those with or dealing with cryptocurrencies to provide information to the country's Capital Market Authority about their activities for tax purposes. This is the first time Kenya has expanded financial regulation to cryptocurrencies.

Under the Capital Market Bill (Ad amend), Kenyans will pay capital profit taxes to the Kenyan Revenue Authority when they sell or use digital currencies.

Cryptocurrencies held in less than a year will be subject to income tax, while after that, capital gains tax will apply. Kenya has income taxes ranging from 10% to 30%. The bank has also imposed an excise duty of 20% for all commissions and crypto trading costs.

The Kenya Revenue Authority (KRA) will go after the more than 4M Kenyans who own #crypto, if MPs approve changes to the Capital Markets (Amendment) Bill, 2022, aimed at regulating and taxing the fast-growing digital currency trade. pic.twitter.com/LRlAgPJucJ

— Njeru's Updates (@NjerusUpdates) November 21, 2022

The amendments will regulate, define digital currencies, manufacture through crypto mining and regulate regulations around digital currency trading. The amendment will also outline the responsibility of people or businesses that trade digital currencies, regulate taxation, ownership, and provide innovation promotions in this area, "said the author of the Parliament Member, Abraham Kirwa,

The bill will define digital currencies as securities, provide licenses for individual crypto traders and create a list of digitally centralized electronic transactions in the country.

The bill will also institute consumer protection measures, such as creating funds "to protect investors from financial losses arising from the failure of licensed brokers or dealers" and privacy guarantees.

The Chainalysis survey released in September ranked Kenya 19th worldwide in cryptocurrency adoption and fifth in peer-to-peer trading. The proposed amendments coincided with Kenyan's President William Ruto's call to double the country's tax base.

The country has about four million cryptocurrency users. That number is about 8.5% of the population, which makes Kenya the fifth-highest crypto-ownership country in the world.