October 21, 2024

KRA Targets Cryptocurrency Traders in New Tax Collection Measures

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According to the Chainalysis 2021 Global Crypto Adoption Index, Kenya ranked sixth globally in cryptocurrency adoption
Statista data showed that projected revenue in the Kenyan cryptocurrency market is expected to reach $41.7 million (KSh 5.2 billion) by 2024
Kenya Revenue Authority (KRA) announced plans to include cryptocurrency into the tax bracket to enhance tax revenue collection

TUKO.co.ke journalist Wycliffe Musalia has over five years of experience in financial, business, and technology reporting and offers deep insights into Kenyan and global economic trends.

Cryptocurrency traders in Kenya will soon start paying taxes to the Kenya Revenue Authority (KRA).

Bitcoin, a cryptocurrency(l). Kenya Revenue Authority (KRA) Commissioner General Humphrey Wattanga speaking at a past event. Photo: Westend61 via Getty/The National Treasury Kenya.
Source: UGC

KRA announced plans to integrate a new digital tax system targeting the sector that has been out of the regulatory bracket.

What are the earnings from Crypto sector in Kenya?

According to the East African, earnings from the sector are legally taxable under the Income Tax Act despite being unregulated by the Central Bank of Kenya (CBK) or Capital Markets Authority (CMA).

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Statista data shows that projected revenue in the Kenyan Cryptocurrency market is expected to reach $41.7 million (Ksh 5.2 billion) by 2024.

Kenya’s growing tech-savvy population and mobile money ecosystem have fueled a surge in cryptocurrency adoption.

According to the Chainalysis 2021 Global Crypto Adoption Index, Kenya ranked sixth globally in cryptocurrency adoption.

Why KRA targets crypto traders

The taxman claimed that the lack of a regulatory framework and robust system for collecting taxes on crypto earnings leads to government revenue losses.

Kenyans transacted an estimated KSh 2.4 trillion in crypto trading, which is about 20% of the country’s GDP.

The number of crypto traders in Kenya is estimated to have grown to 729,200 users, currently not being taxed.

KRA to link with M-Pesa payments

Meanwhile, President William Ruto’s administration announced plans to integrate mobile money payment systems with tax registers.

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Government Senior Economic Advisor Moses Kuria hinted at the plan set to launch in late December 2024.

Kuria noted that linking M-Pesa paybills as virtual electronic tax receipts will enhance the country’s tax base.

He added that the economic council members agreed with KRA Commissioner General Humphrey Wattanga on integrating the paybills.

Proofreading by Mercy Nyambura Guthua, journalist and copy editor at TUKO.co.ke

Source: TUKO.co.ke

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