Kenyan MPs are reportedly considering levying a 15% tax on commercialized internet material in addition to a 3% tax on cryptocurrencies and nonfungible token transfers, according to a newly submitted bill.
The Finance Bill 2023, which was presented to the Kenyan parliament on May 4, would implement a tax on “income derived from the transfer or exchange of digital assets,” and it also contains specific wording for NFTs. The National Assembly will read the measure five times and have committee hearings before voting on it. If the bill passes, the president will sign it into law.
Tax on Cryptocurrencies and NFTs
The tax would have to be collected by cryptocurrency exchanges or those who start the transfer of cryptocurrencies or NFTs, with 3% of the transfer’s value going to the government in the process. Exchanges not registered in Kenya would need to do so to comply with the tax laws.
The plan also aims to enact a tax on “digital content monetization,” which would impose a 15% tax on content producers who are compensated to promote and advertise goods and services online, including but not limited to sponsorships, affiliate marketing, product sales, and paid subscriptions.
- Kenyan MPs are reportedly considering levying a 3% tax on cryptocurrencies and NFTs.
- A 15% tax on commercialized internet material.
- Kenya barely makes it into the top 20 nations for crypto usage.
Online opinions on the bill’s provision for digital assets are divided. Some people were happy to find that cryptocurrency and NFTs appeared to have gained formal recognition in the nation. The Central Bank of Kenya previously issued advisories against utilizing cryptocurrency, but no explicit bans were implemented.
A research and markets analyst from Kenya named Rufas Kamau tweeted on May 4 that the 3% tax was “a joke” and jokingly questioned if it applied to “supermarket and credit card loyalty points.”
A crypto-only tax, according to the Kenyan crypto advocacy organization Cryptocurrency Kenya, is “targeted harassment.” Such a digital tax “must apply to […] everything digital,” it said in a tweet. The government’s planned 3% tax was contrasted with Binance’s 0.10% trading fee to highlight how much more expensive the tax was when compared to the fees levied by exchanges.
Kenya introduced changes to its capital market rules in November that for the first time made it necessary for anybody who holds or deals in cryptocurrencies to register their actions to the authorities.
Kenya barely makes it into the top 20 nations for crypto usage. According to a September analysis by blockchain analytics company Chainalysis, the nation ranked 19th in terms of cryptocurrency usage.
