Kenya’s financial authorities have managed to collect $10 billion (approximately $77.3 million or Rs 6.53 million) from VASPs in fiscal 2023-24. The news was announced by KRA Board Chairman Anthony Mwaura during the Taxpayer’s Day celebration this week. By requiring the formal registration of crypto companies, Kenya effectively tracks businesses involved in digital asset transactions, enabling the country to collect tax revenues related to cryptocurrencies.
Between 2023 and 2024, the Kenya Taxation Agency was able to collect taxes from a total of 384 digital asset dealers, the standard recently reported.
Over the next five years, KRA aims to collect 60 billion (about $464 million) from players in Kenya’s Web3 ecosystem.
This is the first tax cycle for cryptocurrency companies in Kenya, after the country enforced the 2023 Financial Act, which imposed a 3% tax on transfers or exchanges of digital assets. The rule is called Digital Asset Tax (DAT), and applies to traders and exchanges that facilitate digital asset trading.
To ensure Web3 companies comply with tax laws, Kenyan authorities have decided to use technologies such as artificial intelligence (AI) and machine learning (ML) to detect any tax evasion attempts.
According to a 2022 UN report, Kenya has the largest share of African crypto users. According to the United Nations, the country has more than 4 million crypto owners in 2022.
Statista estimates that Kenya’s cryptocurrency sector will see a 4% increase between at least 2024 and 2025. As Kenya’s cryptocurrency sector expands, authorities are taking aggressive measures to protect citizens from financial risks.
Last year, Kenya became the first country to be the world initiative founded by Openai’s Sam Altman. The world project aimed at providing a universal personality proof based on blockchain through “World ID” and IRIS scanning has been under scrutiny. Earlier this year, Kenya directed the project to be officially registered in the country.
Kenya has not yet established a comprehensive regulatory framework for the cryptocurrency sector when it comes to taking measures.
