Crypto taxes raised $78 million in Kenya: full details
Kenya’s financial authorities have managed to collect KES 10 billion (approximately $77.3 million or Rs. 653 crore) from VASPs in the 2023-2024 financial year. The announcement was made by KRA board chairman Anthony Mwaura during the Taxpayers Day celebration this week. By requiring official registration of crypto companies, Kenya has effectively tracked companies involved in digital asset trading, allowing the country to collect reported crypto-related tax revenues.
Between 2023 and 2024, the Kenya Revenue Authority was able to collect taxes from a total of 384 digital asset dealers, local publication The Standard reported recently.
Over the next five years, the KRA aims to collect KES60 billion (approximately US$464 million) from players active in the Kenyan Web3 ecosystem.
This is the first tax cycle for crypto companies in Kenya after the country enforced the Finance Act of 2023, which introduced a three percent tax on the transfer or exchange of digital assets. This rule is called the Digital Assets Tax (DAT) and applies to both traders and the exchanges that facilitate the trading of digital assets.
To ensure that Web3 companies comply with tax laws, Kenyan authorities have decided to use technologies such as artificial intelligence (AI) and machine learning (ML) to detect any attempt at tax evasion.
According to one UN report 2022 Kenya has the largest share of crypto users in Africa. According to the UN, the country had more than four million crypto owners in 2022.
Statistical estimates that the Kenyan crypto sector will see growth of at least four percent between 2024 and 2025. As Kenya’s crypto sector grows, authorities are taking proactive measures to protect citizens from financially risky projects.
Last year, Kenya became the first country to investigate the World Initiative, founded by Sam Altman of OpenAI. The World project, which aims to provide blockchain-based universal proof of personality through ‘World IDs’ and iris scans, is under scrutiny. Earlier this year, Kenya ordered the project to be officially registered in the country.
Although steps are being taken, Kenya is yet to establish a comprehensive regulatory framework for the crypto sector.
