Kenya Revenue Authority to Track Crypto Transactions for Taxation

AFRICAN STOCKS AND FINANCEOctober 15, 2024 at 11:33 AM UTC

TLDR

Kenya Revenue Authority (KRA) implementing real-time tax system for cryptocurrencies, targeting the country's high number of crypto users.
KRA aims to broaden tax base by monitoring and taxing crypto transactions, which amounted to $18.6 billion in 2022.
Challenges include tracking peer-to-peer (P2P) transactions via mobile money, raising regulatory oversight issues for KRA.

The Kenya Revenue Authority (KRA) plans to implement a real-time tax system that integrates with cryptocurrency exchanges to monitor transactions and collect taxes.

With an estimated four million crypto users in Kenya, one of the highest rates in Africa, the agency aims to broaden its tax base by capturing earnings from crypto activities after reporting that crypto transactions in 2022 amounted to $18.6 billion (KES2.4 trillion), more than the volume handled by some commercial banks.

The new system will record transaction details, such as date, time, type, and value, in collaboration with exchanges like Binance and Coinbase. But most Kenyan traders use peer-to-peer (P2P) transactions via mobile money to avoid regulatory oversight, leaving the KRA to grapple with challenges in tracking these activities due to outdated systems.

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Key Takeaways

Kenya’s growing cryptocurrency market, driven by young traders and low transaction fees, presents a new frontier for tax collection. The KRA’s plan to integrate with crypto exchanges reflects the government's intent to tap into this emerging sector. However, the lack of clear legal status for crypto exchanges and the widespread use of P2P transactions could complicate efforts to track and tax crypto earnings effectively. As Kenya seeks to modernize its tax infrastructure, legislative changes are underway to formalize crypto taxation.

Cryptocurrency

Kenya

Kenya Revenue Authority

Bitcoin

Ethereum