Kenya is looking to tax cryptocurrency transactions of its citizens with a 3% levy in its upcoming budget. The proposal was included in the country's Finance Bill 2023 and has been presented to lawmakers by the National Treasury. This move will make Kenya the latest country to implement taxes related to the digital asset industry.

The Kenyan government is yet to issue any solid regulations aimed to legitimize cryptocurrency activities and exchanges. Speculation on the matter started when President William Ruto was elected in 2022, as he was seen as more crypto-friendly than his opponent Raila Odinga. Later that year, legislators proposed a taxation bill directed towards crypto exchanges, digital wallets and transactions.

According to a United Nations report, around 8.5% of the Kenyan population or 4.25 million people own cryptocurrencies, making the nation the 5th in the world in crypto adoption. The Finance Bill 2023 includes details on what is defined as a digital asset, citing cryptocurrencies, token codes, numbers held in digital form (generated through cryptographic means), non-fungible tokens, and the income derived from exchanging or transferring digital assets.

In recent times, more countries have adopted this kind of policies, in order to add some legitimacy to the digital asset space without giving away too much. Whether the Kenyan people will accept the taxation of their cryptocurrency holdings or fight against it remains to be seen.



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