Kenya Proposes New Crypto and NFT Transaction Tax Bill
The Kenyan government is reportedly reconsidering tax measures affects cryptocurrency transactions, online advertising and non-fungible token (NFT) transfers.
According to reports, the government is looking for new revenue streams to finance the budget and is considering taxing these industries.
Kenya Enacts Crypto Tax Law
The country’s lawmakers aim to introduce a capital gains tax on profits from cryptocurrency trading. As such, they will place a tax of 3% on digital assets. This move seeks to regulate the sector and ensure that cryptocurrency traders contribute to the country’s tax revenue.
Legislators are also considering introducing a tax on the transfer of NFTs. These digital assets represent ownership of unique artwork, music and videos. According to them, NFT transfers will receive a corresponding tax rate of 3%.
Furthermore, the lawmakers noted in the bill that they will impose a 15% tax on online influencers, who have become a powerful force in the advertising industry. The proposed tax will be levied on income influencers who generate through various social media platforms.
Some of the products and services included in the bill are also associated with marketing, sponsorship, paid subscriptions and merchandise.
Meanwhile, the government has yet to pass the bill. In particular, it will have to go through various assessment sessions, including five reading rounds, reports and committees, by the National Assembly. Finally, it will eventually move to the president’s desk for final review and consideration before becoming law.
Nevertheless, the Kenyan government has moved to impose new tax measures on these industries attracted more reactions online.
Individuals address the move of the new bill
There have been several thoughts about the legislature’s move to create new tax measures that encompass virtual asset industries.
Kenya Market and Research Analyst Rufas Kamau addressed made the move in a tweet on May 4, noting that the 3% tax on digital assets was a joke. He asked if it applies to credit card and supermarket points.
In another chirping, Kenya’s digital asset advocacy group, Cryptocurrency Kenya, stated that the digital tax must include everything digital. It also noted that applying it to only crypto is targeted harassment.
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The group also mentioned the difference between the tax rate and the fees crypto exchanges charge on transactions. It used Binance’s 0.10% and 0.50% fees as a scenario, noting that the 3% tax rate is higher.
The Central Bank of Kenya has previously warned on the use of digital currencies. However, it has never introduced any bans. Nevertheless, crypto users and investors always recognize the risks involved in trading digital assets and exercise caution at all times.
Featured image from Pixabay and chart from Tradingview
