A bill presented in Kenya could see a tax added to cryptocurrency and NFT transfers and has been caught with a hybrid reaction online.
Kenya’s lawmakers are considering the preface of a 3% tax on cryptocurrency and nonfungible token transfers and a 15% tax on monetized online content, according to a recently presented bill.
Presented to the Kenyan parliament on May 4, The Finance Bill 2023 would enact a digital asset tax on “ income derived from the transfer or exchange of digital assets, ” and similarly includes specific language for NFTs.
The bill will undergo 5 rounds of readings, committees, and reports by the National Assembly; if passed, it'll further go to the president for final assent into law.
Crypto exchanges or those who start the transfer of crypto or NFTs would be needed to collect the tax, having to deduct 3% of the transfers ’ worth to be paid to the government. Exchanges not registered in Kenya would have to register under the tax governance.
The bill similarly seeks to bring about a tax on “ digital content monetization, ” levying a 15% tax on content creators paid to raise and advertise products and services online including but not limited to sponsorships, affiliate marketing, merchandise sales & paid subscriptions.
The digital assets section of the bill has remarked a hybrid response online.
Some were thankful to see that crypto and NFTs were seemingly presently officially recognized in the country. preliminarily, the Central Bank of Kenya has warned against utilizing crypto but no outright prohibitions were put in place.
Rufas Kamau, a Kenyan exploration and markets analyst, tweeted on May 4 that the 3% tax was “a joke” and sarcastically questioned if it applies to “supermarket and credit card loyalty points.”
Kenyan crypto advocacy group, Cryptocurrency Kenya, twittered that such a digital tax “ must apply to [...] everything digital, ” claiming a crypto-only tax is “ targeted harassment. ”
It similarly pointed out the tax was higher when compared to the fees charged by exchanges, comparing the regimen's offered 3 tax to Binance’s0.10 trading fee.
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Kenya first produced an effort to regulate crypto in November, presenting amendments to its capital market laws needing those who own or deal in crypto to report data on their activities to the authorities.
Kenya scrapes into being in the topmost 20 nations when it comes to crypto adoption. A September report from blockchain analytics firm Chainalysis placed the country 19th in terms of crypto adoption.
(JESSE COGHLAN, Cointelegraph, 2023)