Kenya collects $77.5M in crypto taxes and eyes $465M goal

In the 2023-24 fiscal year, Kenya’s government collected $77.5 million in taxes from cryptocurrency traders, totaling approximately 10 billion Kenyan shillings.

Anthony Mwaura, head of the Kenya Revenue Authority (KRA), shared that the tax was gathered from 384 active crypto dealers in the country.

With a growing focus on the crypto sector, the KRA has set a future target to collect over $465 million solely from cryptocurrency traders.

Over the next five years, Kenya’s overall revenue goal stands at $158.8 billion, positioning the cryptocurrency market as a key revenue source.

To achieve this, the KRA has proposed integrating a real-time tax system with cryptocurrency exchanges to monitor transactions effectively.

This new system is designed to capture essential details, such as the exact time and value of each crypto transaction, for more accurate tax assessment.

Mwaura stated that by collaborating with the Central Bank of Kenya (CBK), the KRA could potentially collect 60 billion shillings ($465 million) in crypto-related taxes within the year.

While Kenya is one of Africa’s largest crypto markets, the KRA has faced challenges in accurately taxing cryptocurrency traders due to limited regulatory frameworks.

The Kenyan Treasury announced earlier this year that it would apply a 1.5% digital tax on revenues generated by cryptocurrency exchanges to enhance tax compliance.

Challenges such as low public awareness, legal ambiguities, and the unpredictable nature of cryptocurrency markets have hindered the KRA’s tax collection efforts.

KRA Commissioner General Mr. Wattanga shared that the agency plans to utilise machine learning, artificial intelligence, and data analytics to improve its tax collection from crypto traders.

The KRA’s strategic use of technology aims to better track transactions and reduce revenue losses from the growing cryptocurrency sector.

With these new tools and increased regulatory efforts, Kenya’s government hopes to make significant strides in collecting crypto taxes while addressing gaps in legal frameworks.

As crypto adoption rises, Kenya’s tax authorities are actively working to ensure the industry contributes fairly to national revenue.

This initiative reflects Kenya’s commitment to integrating cryptocurrency into its economy while maximising tax revenue from this rapidly evolving sector.