Kenya has planned digital service tax will be applicable to cryptocurrencies, rate of 1.5% on gross transaction value
The Kenya Revenue Authority (KRA) has confirmed that the upcoming Kenya Digital Service Tax (DST) will be applicable to cryptocurrencies at a rate of 1.5% on gross transaction value, which takes effect beginning on January 1, 2020 and submitted via an online form, according to the local outlet Bitcoinke.
KRA tax expert Nixon Omondi has appeared to set the record straight, said:
“The world is getting more digital. We now have digital wallets. As the law is, any person who will be offering a digital service – crypto is digital, the platform is digital, the acquisition process is digital, the process of payment is digital – in that respect, DST will be applicable on cryptocurrencies.”
Kenyan crypto businesses will make similar payments, too. However, local firms “have the option of claiming back their digital service tax at the end of the year since they also pay other taxes within the Kenyan jurisdiction,” said the report.
KRA also revealed that while discussions are still ongoing on how to tax cryptocurrencies – whether it should be subjected to capital gains tax, VAT, or income tax – the current regulation requires that platforms dealing in cryptocurrencies be subjected to digital service tax.
This clarification means that foreign P2P platforms like Paxful, Remitano, Binance P2P, LocalBitcoins, Bitzlato, and more are operating in Kenya, will now be required to remit a 1.5% tax to the Kenya government for their services.
Kenya has always been a leader in the technology sector in Africa. Bitcoin adoption hasn’t been any different, with Paxful revealing, “We have seen steady growth in Africa, with Nigeria, Kenya, South Africa and Ghana leading. Africa has many of the world’s unbanked people, fortunately, Bitcoin provides a new way for them to access the global financial system.”
As AZCoin News reported, Kenya is Africa’s third-biggest bitcoin market after Nigeria and South Africa. Nigeria has led the continent’s growth in 2020, posting weekly P2P volumes of between $5 million to $10 million, followed by Kenya and South Africa with between $1 million and $2 million a week each.
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