Digital Tax Law Effective in Kenya Affecting Crypto Firms

Digital and crypto transactions in Kenya now cost a 1.5% tax. This is a result of the new digital tax law effective at the start of 2021.

Kenya’s Digital Service Tax (DST) is part of her 2020 Finance Act. This law focuses on the digital services or fintech industry and other sectors. As a result, e-commerce payments including crypto transactions now attract a 1.5% tax.

A country representative of Bitzlato, Reginald Alango said the new law demands a 1.5% levy on all digital transactions. No doubt, all sales in cryptocurrency, are part of the drill. However, Alango also said that there are a lot of factors behind the rapid crypto adoption in East Africa. Therefore, there may be no negative impact on the cryptocurrency business in Kenya.

According to the Kenyan Revenue Authority (KRA), the Digital Service Tax will be the final tax payment for non-resident individuals. Also, companies transacting in Kenya but with no offices in the country. Meanwhile, residents will have to offset their DST against any income tax during the year. Companies with offices in Kenya will also do the same.

The new digital tax law effective in Kenya puts the country among other nations levying taxes on cryptocurrency transactions.

However, according to Alango, the new tax law does not mean the Central Bank of Kenya recognizes Bitcoin as a legal currency.

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