A Kenyan parliamentary committee passed a bill that would define crypto-assets as securities and impose capital gains tax on them. It will next be submitted to the lower house of parliament.
According to Kenya’s “Business Daily” report on December 4, the “Capital Markets (Amendment) Bill 2023” has been approved by the Finance and National Planning Committee of the National Assembly. The report quoted committee chairman Kimani Kuria as saying:
“This is a very important law that will protect our country from the proceeds of crime and the financing of terrorism. Millions of Kenyans are already trading in cryptocurrencies, but we have no laws to govern it. We approve the publication of this bill.”
After approval by the committee, the bill will proceed to the reading stage in the National Assembly, the lower house of Kenya’s parliament.
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The Capital Markets (Amendment) Bill, 2023 amends the country’s tax laws to impose tax on crypto assets stored on cryptocurrency exchanges and digital wallets. In its framework, Kenyans will pay capital gains on the increased market value of cryptocurrencies when they sell or use them in transactions.According to the Business Daily, while the full text of the bill has not yet been released, “banks [will] Commissions and fees charged on all transactions are net of 20% GST. “
If the bill is passed, Kenyan citizens will be obliged to declare all their crypto assets and their value in Kenyan shillings to the Kenya Revenue Authority. The report quotes part of the bill:
“Persons who own or trade digital currencies should provide the Authority with the following information for tax purposes – the amount of trading proceeds, any costs associated with the trading and the amount of trading gain or loss.”
While Kenya is only gearing up to impose a cryptocurrency tax, tax authorities in other countries have recently been vocal about their desire to go after anyone who fails to accurately declare their cryptocurrencies. For example, HMRC requires UK holders to declare any cryptocurrency that has not been reported in the past four, six or even twenty years.
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