A Kenyan parliamentary committee has reportedly approved a bill that proposes to widen the definition of securities to include cryptocurrencies.
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The proposal came after the National Assembly’s Departmental Committee on Finance and National Planning directed the Blockchain Association Of Kenya (BAK) to prepare the first draft of what could become a “virtual asset service provider’s bill.”
The bill proposes a tax on crypto exchanges and digital wallets as well as a capital gains tax on users who realize a capital gain from the sale of their crypto assets.
The Bill is only two Readings away from Presidential Assent
According to a report, the bill sponsored by Abraham Kirwa, a member of parliament (MP) for Mosop, is now set to go to the Kenyan National Assembly for a second reading.
Legislators are expected to debate and make further amendments at the third reading stage.
Once the bill, known as the Capital Markets (Amendment) Bill, 2023, is approved, it will be sent to the Kenyan president for his assent. Kimani Kuria, whose committee approved the bill, said regulating the crypto space is especially crucial in a country that boasts millions of users.
“This is a very critical law that will guard our country against proceeds of crime and terrorism financing. Cryptocurrencies are already being traded by millions of Kenyans yet we have no law to govern it. We approve this Bill for publication,” Kuria, an MP for Molo, reportedly said.
Capital Gains Tax on Crypto
As explained in the report, the Kenyan Capital Markets (Amendment) Bill, 2023 seeks to introduce taxes on crypto exchanges and digital wallets.
The bill also proposes a capital gains tax on users who realize a capital gain from the sale of their crypto assets.
The sponsor of the bill, Abraham Kirwa, a member of parliament (MP) for Mosop, insisted that this bill will help ensure that Kenyans are shielded from risks commonly associated with cryptocurrencies.
Kirwa also accused the Central Bank of Kenya of dragging its feet and not doing enough to ensure crypto users are protected.
The former governor of the CBK Patrick Njoroge has spoken out against crypto and bitcoin during his tenure. But this has not stopped many Kenyans from embracing crypto assets, and the country is now widely seen as one of Africa’s biggest crypto markets.
However, among some of the bill’s key proposals is the necessity of any person possessing cryptocurrencies to report to Kenya’s Capital Markets Authority with details such as the number of proceeds from the transaction, any costs related to the transaction, and the amount of any gain or loss on the transaction.
