The Kenya Revenue Authority KRA plans to switch a new real-time tax system that will integrate with cryptocurrency exchanges, allowing it to monitor crypto transactions and collect taxes.
Kenya has an estimated four million crypto users one of the highest in Africawhich the East African nation is keen to tax as it broadens its tax base. KRA said that crypto transactions in 2022 were valued at around 18.6 billion KES2.4 trillion, which could be higher than money handled by some commercial banks.
The system shall integrate with cryptocurrency exchanges and marketplaces to track and record cryptocurrency transactions. It shall capture transaction details, including transaction date, time, type and value, KRA said in a document outlining their tax collection strategies for the financial year 2024/25.
While the crypto sector is still largely unregulated by Kenyan regulators including the Capital Markets Authority CMA and the Central Bank of Kenya CBK, it has gained popularity with exchanges such as Binance and Coinbase offering services.
Most crypto buyers and sellers in the country use P2P transactions, accepting payments through mobile money to avoid regulators. KRA said the agency has been unable to track and tax transactions due to an outdated system which has led to a significant loss of revenue for the government.
