Kenya will start taxing cryptocurrencies exchanges for commissions they receive from the over four million people dealing in digital currencies in the country if fresh regulations are adopted.
The new regulations guiding the payment of the digital service tax require platforms that facilitate the buying and selling of cryptocurrencies and other digital assets to pay a 1.5 percent duty.
“For the purposes of these Regulations, a taxable electronic, Internet or digital marketplace supply include…facilitation of online payment for, exchange or transfer of digital assets excluding services exempted under the Act,” say the Value added Tax (Electronic, Internet and Digital Marketplace Supply) Regulations, 2023 published by Treasury Cabinet Secretary Njuguna Ndung’u.
A digital asset is anything that is created and stored digitally and has or provides value.
Digital assets include cryptocurrencies such as bitcoins, data, images, video, and written content.
In January 2021, Kenya implemented the 1.5 percent digital service tax, which officials say has already helped curbed tax avoidance by some multinational companies.
It is levied on foreign businesses not registered in Kenya but offer services to Kenyans through a digital marketplace.
Fees charged by the popular online exchanges for selling and buying crypto range from a low of 0.9 percent to 4.9 percent.
