Kenya generates $77M in taxes from crypto traders, aiming for $465M with new tech and legal reforms to track transactions.
Kenya’s tax authority, the Kenya Revenue Authority (KRA), raised $77.5 million (about 10 billion shillings) from 384 crypto traders during the 2023-24 financial year, according to Anthony Mwaura, head of the KRA. Mwaura announced an event celebrating Kenyan taxpayers. Kenya has one of Africa’s most significant cryptocurrency markets, though it has struggled to tax the industry efficiently.
The KRA’s next target is raising the crypto transaction tax. The authority plans to collect more than $465 million (Sh60 billion) from cryptocurrency traders in the coming years. The KRA aims to collect $158.8 billion in taxes for the next five years, and crypto is among the priorities.
KRA has suggested implementing an RTT system to monitor cryptocurrency trades better and increase tax collection. This system will be connected to cryptocurrency exchanges so the tax authority can get all the transaction details, such as the time and price. This system is believed to enhance efficiency and transparency in tax administration.
Kenya Aims for $465M from Crypto Traders
Mwaura discussed KRA’s strategy of partnering with the Central Bank of Kenya (CBK) to enhance measures in the cryptocurrency industry. He said this is achievable through partnering with the CBK to attract Sh60 billion ($465 million) from crypto traders.
However, the KRA still presents specific difficulties. These include challenges in tracing the flow of cryptocurrencies because there are no clear legal frameworks concerning digital assets. Furthermore, there is relatively low public awareness of these regulations, and the nature of the market means that tax enforcement is far from straightforward.
To overcome these problems, KRA intends to employ new technologies, including machine learning, Artificial intelligence, and data analytics. These tools will assist the tax authority in tracking cryptocurrency activity more efficiently and reducing the level of evasions in the sector.
Lastly, Kenya has made significant progress in taxing cryptocurrency traders. However, the KRA’s future success depends on technology enhancement, better legal reforms, and more cooperation with other organizations in Kenya. The government’s ambitious targets could be achievable if these efforts are successfully implemented.
