Scoring a Win for Kenya's Digital Asset Market: Proposed Changes in Finance Bill 2025
Kenyan Treasury Plans to Lessen Tax Burden on Cryptocurrency Assets
An exciting development is brewing in Kenya's digital economy! The National Treasury has put forward a proposal to slash the taxes imposed on digital asset transactions from the current 3% to a more inviting 1.5%. This move is expected to lower the costs associated with transferring assets like cryptocurrencies and non-fungible tokens (NFTs).
The latest draft of the Finance Bill 2025 presents these changes, as evidenced in the following amendment:
This adjustment has the potential to boost digital asset adoption within the nation, leading to a surge in Kenyan cryptocurrency users.
Meanwhile, here are some relevant news bits:
- Kenya Revenue Authority Issues Notice on Renewal of Betting Licenses (April 30, 2025)
- Betting Control and Licensing Board Suspends Gambling Ads Across All Media Platforms (April 29, 2025)
- Exclusive: Harnessing Data for Growth: Shivika Singh's Two-Decade Odyssey in Gaming and Data Analytics (March 24, 2025)
- Kenya Launches 'Crypto' Bill Amid Call for Better Oversight (January 23, 2025)
And don't forget to catch up on the intriguing article, "Kenya Introduces Virtual Assets Bills to Regulate Crypto and the Digital Finance Sector".
The proposed tax adjustments pertain to digital assets identified as intangible assets of value, such as cryptocurrencies, token codes, or numbers held digitally and generated through cryptographic means, providing digital representation for value exchanged. Digital asset tax first made an appearance in the Finance Act 2023, with a rate set at 3% of the gross fair market value of cryptocurrency transactions. Initial estimates from Kenya Revenue Authority (KRA) indicated a market valued at around KSh 2.4 trillion.
Late last year, the Virtual Assets Service Providers Bill of 2025 was introduced in parliament, aiming to compel virtual currency exchanges and wallet providers to reveal the owners of cryptocurrencies—a step intended to curb tax evasion, crime, and hacking.
While the bill suggests a rate reduction, intense lobbying from within the cryptocurrency industry indicates ongoing negotiations and a potential lack of consensus on the issue. Some cryptocurrency companies, including Luno and Busha, have voiced their opposition to the existing 3% tax, maintaining that it negatively impacts Kenya's crypto ecosystem. They are currently rallying support by gathering funds for legal challenges and enlisting advisory support from firms like PwC. The thinly veiled industry resistance cautions that legislative ambiguity or competing proposals may persist.
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- The National Treasury's proposal to reduce the tax on digital asset transactions from 3% to 1.5% could boost the adoption of cryptocurrencies in Kenya, according to the Finance Bill 2025.
- The Finance Bill 2025 amendment proposes to tax digital assets such as cryptocurrencies, token codes, or numbers held digitally as intangible assets of value.
- In opposition to the current 3% tax on cryptocurrencies, some companies like Luno and Busha have expressed their concerns and are seeking support to challenge it through legal means and advisory support from firms like PwC.
- The Virtual Assets Service Providers Bill of 2025, introduced last year, aims to compel virtual currency exchanges and wallet providers to disclose the owners of cryptocurrencies to curb tax evasion, crime, and hacking.
