Kenya has imposed a new digital tax which will affect its crypto platforms across the country. Kenya Revenue Authority (KRA) made the announcement regarding the new regulation which will compel users of digital marketplaces to pay digital tax.
The new tax will come into effect from the beginning of next year at a rate of 1.5% on gross transaction value.
The KRA will create a special unit which will track and tax transactions using “data-driven detection.” A report also mentioned that “at this stage, the precise meaning of a digital market place and those who will be impacted by the digital tax is unclear.”
A tweet from Kenyan Revenue Authority said: “Tax Procedures Act Introduction of a Voluntary Disclosure Programme Where a taxpayer discloses tax liabilities that were previously undisclosed to the Commissioner for the purpose of being granted relief of penalties and interest of the tax disclosed.
“Tax Procedures Act Appointment of a Digital Service Tax Agent Empowers the Commissioner to appoint an agent for the purposes of collection and remittance of the Digital Service Tax (DST),” another tweet said.
It should be understood that in Kenya, ryptocurrency platforms “fall under the digital marketplace designation since they offer a platform for buyers and sellers of crypto through electronic means.”
Kenya, however, does not regulates cryptocurrencies although the report notes the KRA has been pushing the central bank to recognize these assets for revenue collection purposes.
David Gitonga, founder & Managing Editor at Bitcoinke, said that the bill will put spotlight on digital activities.
“I think this bill is going to put a spotlight on many digital activities, including crypto trading, and this might open the door to some form of crypto regulation,” said Gitonga.
He goes on to explain that “crypto regulation has long been ignored because there is a general lack of understanding of how fast this space is growing in Kenya.”