While some crypto community members appreciate the tax proposal, others call it "a joke."
Kenya's legislators are weighing on a new proposal that would impose a 3% tax on cryptocurrency and non-fungible token (NFT) transactions and a 15% tax on online content monetization.
The Finance Bill 2023, presented to the Kenyan Parliament on May 4th, aims to tax revenue generated from digital asset transactions, including NFTs.
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After undergoing five stages of readings, committee evaluations, and National Assembly reports, the bill could become law with the president's final approval.
The proposed tax framework would require crypto exchanges and those initiating crypto or NFT transfers to collect the 3% tax and submit it to the government. Non-Kenyan crypto exchanges would need to register under the tax regime to comply.
On top of that, the bill proposes a 15% tax on content creators who earn money through promoting and advertising products and services online, including sponsorships, affiliate marketing, merchandise sales, and paid subscriptions.
The digital asset tax proposal has received mixed reactions from the public. Some appreciated the official recognition of crypto and NFTs in Kenya, while others criticized the tax rate as too high compared to existing fees charged by exchanges. For instance, the proposed 3% tax is significantly higher than Binance's 0.10% trading fee.
Kenyan research and markets analyst, Rufas Kamau, took to Twitter to comment on the proposed bill, calling it "a joke."
The group behind the Kenyan crypto industry, Cryptocurrency Kenya, also shared their thoughts on the matter, claiming that digital tax "must apply to <...> everything digital." The group emphasized that applying tax only to crypto makes it "targeted harassment."
It is worth noting that it is not the first time the Kenyan government is considering crypto-related taxes. At the end of November 2022, Kenyan lawmakers revealed plans to impose a tax on crypto transactions.
