đ„đ„ Kenya Revenue Authority Enhances System to Monitor Cryptocurrency Transactions đšđš
1. KRA's New Tax Monitoring System:
Kenya Revenue Authority (KRA) is launching a real-time system to monitor cryptocurrency transactions, capturing date, time, type, and value of each transaction.
The system is designed to trace every transaction, making tax evasion more difficult.
2. System Launch Timeline:
The new system is expected to go live by the end of the year and will work closely with cryptocurrency exchanges to record detailed transaction data.
3. Significant Market Size:
Kenya has nearly 4 million cryptocurrency users, with a transaction volume of $18.6 billion in 2023. This growing market demands close attention.
4. Existing and Updated Tax Laws:
Previously, KRAâs tax laws mainly applied to companies without a physical presence in Kenya.
Updated tax laws, introduced last September, now require cryptocurrency investors to pay taxes on income from their transactions.
5. Cryptocurrency Exchangesâ Tax Obligation:
Under current regulations, cryptocurrency exchanges must pay 3% of each transaction amount to the government.
6. Advanced Technology for Tax Compliance:
KRA plans to employ artificial intelligence (AI) and machine learning to analyze transaction data, improving the efficiency and accuracy of tax compliance.
Additionally, from December 25, 2024, M-PESA payroll and cash register numbers will be used as electronic tax registers to combat tax evasion.
7. International Case Example:
A cryptocurrency exchange in Nigeria is under trial for not registering for taxes, with Binance as the sole defendant in the case, indicating that African countries are increasingly serious about cryptocurrency taxation.
8. Implications for Kenyan Crypto Traders:
Kenyan cryptocurrency investors will need to consider tax liabilities more carefully moving forward as the government intensifies efforts to integrate crypto transactions into the formal tax system.
