Kenya's Finance Ministry, the National Treasury, has proposed a 3% tax on the transfer of digital assets for the coming budget year, according to a Bloomberg report that cites proposals presented to lawmakers. The nation's budget will be presented on June 8.
Kenya elected William Ruto as its President in 2022 when its regulators had not yet proposed any sort of actual crypto rules. President Ruto was assumed to be more crypto-positive than losing candidate Raila Odinga. Later in 2022, lawmakers considered a bill that would allow for the taxation of crypto exchanges, digital wallets and transactions.
The proposed tax on digital assets appears to be a first without necessarily legitimizing the space, a move that other nations have undertaken in recent times too. Roughly 8.5% of the Kenyan population or 4.25 million people own cryptocurrencies, ranking the nation fifth in the world in global adoption of crypto, according to a report by the United Nations.
The Finance Bill 2023, seen by local news outlet Kenyans.co.ke, defines the term "digital asset."
"Digital asset” includes anything of value that is not tangible and cryptocurrencies, token codes, and numbers held in digital form and generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration that can be transferred, stored or exchanged electronically; and a non-fungible token or any other token of similar nature, by whatever name called; and the income derived from transfer or exchange of a digital asset” means the gross fair market value consideration received or receivable at the point of exchange or transfer of a digital asset," read part of the Finance Bill 2023, according to Kenyans.co.ke.
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