The Kenya Revenue Authority KRA is preparing to implement a new real-time tax system that will integrate with cryptocurrency exchanges, enabling the government to monitor crypto transactions and collect taxes.
With approximately four million crypto users, Kenya ranks among the highest in Africa for cryptocurrency adoption, and the country is eager to tax this growing sector as part of its efforts to expand the tax base. In 2022, KRA reported that crypto transactions were valued at around 18.6 billion KES 2.4 trillion, surpassing the volume of funds managed by some commercial banks.
"The system will integrate with cryptocurrency exchanges and marketplaces to track and record cryptocurrency transactions. It will capture details such as the transaction date, time, type, and value," KRA explained in a document outlining its tax collection strategies for the 2024/25 financial year.
Although Kenyas crypto market is still largely unregulated by the Capital Markets Authority CMA and the Central Bank of Kenya CBK, it has become increasingly popular, with exchanges like Binance and Coinbase providing services.
Many crypto users in Kenya rely on peer-to-peer P2P transactions, often using mobile money for payments to evade regulatory scrutiny. The KRA acknowledged that its current outdated system has made it difficult to track and tax these transactions, resulting in a 'significant loss of revenue for the government."
