Crypto stakeholders call for streamlined tax compliance in Kenya

Stakeholders in the digital asset industry are urging the Kenya Revenue Authority (KRA) to simplify tax compliance processes for the growing crypto sector.

The industry players converged at the Digital Asset Tax Roundtable, hosted by the Virtual Asset Chamber of Commerce, in collaboration with Chasing Mavericks and the Kenya Blockchain & Crypto Conference, where industry representatives discussed challenges with the recently introduced 3% tax on digital asset transactions.

S.A. Kakai, Policy and Regulatory Engagement Lead at the Virtual Asset Chamber of Commerce highlighted the challenges surrounding the newly introduced 3% tax on cryptocurrency transactions

"There are challenges yet to be addressed, and an implementation process that still needs refining," said Kakai, who also raised concerns about the legal frameworks and urged for policies that support businesses amidst tax obligations.

KRA’s Manager of the Digital Economy Tax Office Nixon Omondi, explained the recent regulatory changes under the Income Tax Act and the expanded Digital Service Tax. He underscored the potential for technology to close gaps in tax evasion in the digital asset space.

“The plain reading of the law mandates that these entities must be taxed. It would be easier to pay tax as soon as possible to enhance compliance and assist people to uphold compliance” said Omondi

Apollo Sande, a Country Launch Specialist for Luno, suggested collaborative efforts with revenue authorities.

“To thrive, Africa’s crypto industry must proactively collaborate with regulators. Engaging revenue authorities and policymakers is key to fostering a sustainable environment where cryptocurrency can achieve its potential for financial inclusion and economic empowerment” explained Sande

Sheila Waswa, CEO of Chasing Mavericks and co-convener of the forum, called for further collaboration between government agencies and industry players.

“By working together, we can ensure that this technology thrives in a well-regulated environment, promoting both innovation and compliance,” she emphasized, urging for ongoing engagement with KRA and the National Treasury to create policies that support blockchain innovation.

The roundtable concluded with an agreement on the need for continued dialogue and the formation of a working group to address tax compliance challenges.

The Virtual Asset Chamber of Commerce will lead further engagements with the Capital Markets Authority to explore a framework for sandboxing and licensing in the sector.