The Kenyan government’s proposal to tax cryptocurrency transactions, NFT transfers, and online advertising has sparked mixed reactions from the public. The move aims to generate revenue for the government’s budget and ensure that cryptocurrency traders contribute to the country’s tax revenue. However, some industry players have expressed concern about the proposed tax measures.
According to reports, the government plans to impose a 3% tax on profits made from cryptocurrency trading. This move attempts to regulate the sector and ensure that cryptocurrency traders contribute to the country’s tax revenue.
The lawmakers are also considering imposing a tax on the transfer of NFTs, digital assets that represent ownership of unique artwork, music, and videos. Additionally, they plan to impose a 15% tax on online influencers who generate income through various social media platforms.
Kenya markets and research analyst Rufas Kamau has criticized the proposed tax measures, calling the 3% tax on digital assets a joke. He questioned whether the tax would also apply to credit card and supermarket loyalty points.
Kenya’s digital asset advocacy group, Cryptocurrency Kenya, has also expressed concern about the proposed tax measures. The group believes that the digital tax should include all digital assets and not just cryptocurrencies. It also noted that the tax rate of 3% is higher than the fees crypto exchanges charge on transactions.
The Central Bank of Kenya has previously warned about the use of digital currencies. However, it never put any prohibitions in place. Despite this, crypto users and investors always recognize the risks of digital assets trading and exercise caution at all times.
The proposed tax measures have also sparked a debate about the government’s approach to generating revenue. Some people believe that the government should focus on creating an enabling environment for businesses to thrive rather than imposing new taxes. Others argue that the government needs to explore new revenue streams to fund its budget.
The proposed tax measures are not unique to Kenya. Several other countries, including the United States, have also proposed taxing cryptocurrency transactions. However, the move has faced opposition from some industry players who believe that it could stifle innovation and growth in the sector.
The debate around the proposed tax measures is likely to continue as the government seeks to generate revenue to fund its budget. However, it is essential to strike a balance between generating revenue and creating an enabling environment for businesses to thrive. Ultimately, the government’s approach will determine the success or failure of the proposed tax measures.
