Kenya Is Thinking About Taxing Cryptocurrency, NFT Transactions, and Internet Influencers

Online responses to a measure filed in Kenya that might impose a tax on Bitcoin and NFT payments have been varied.

Source: www.benjamindada.com

According to a recently filed bill, Kenyan MPs are considering enacting a 3% tax on cryptocurrency and non-fungible token (NFT) transactions and a 15% tax on commercialized internet content. The Finance Bill, 2023, which was introduced on May 4 to the Kenyan parliament, would implement a tax on income derived from the sale or exchange of electronic assets and specifically mention NFTs.

The National Assembly will go through five rounds of readings, committee hearings, and reports before sending the measure to the president for final approval and signing into law. The tax would have to be collected by cryptocurrency exchanges or those who start the transfer of cryptocurrencies or NFTs, with 3% of the transfer's value going to the government in the process. Exchanges not registered in Kenya would need to do so in order to comply with the tax laws.

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The plan also aims to enact a tax on digital content monetization, which would impose a 15% tax on content producers who are compensated to promote and advertise goods and services online, including but not limited to sponsorships, affiliate marketing, product sales, and paid subscriptions. Online opinions on the bill's provision for digital assets are divided. Some people were happy to see that cryptocurrency and NFTs appeared to have gained official recognition in the nation. The Central Bank of Kenya previously issued advisories against utilizing cryptocurrency, but no explicit bans were implemented.

On May 4, Rufas Kamau, a research and markets analyst from Kenya, jokingly referred to the 3% tax as a joke and queried whether it applied to supermarket and credit card loyalty points. Cryptocurrency Kenya, a Kenyan advocacy organization for cryptocurrencies, stated that such a digital tax must apply to [...] everything digital and that a tax that solely applies to cryptocurrencies is targeted harassment. The government's planned 3% tax was contrasted with Binance's 0.10% trading fee to highlight how much more expensive the tax was when compared to the fees levied by exchanges.

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