Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
The Kenyan government intends to introduce a 3% tax on cryptocurrency transactions to reduce the country’s fiscal deficit and enhance its domestic revenue streams.
Kenya is recognized as a frontrunner in cryptocurrency adoption within Africa. Patrick Njoroge, the Governor of the Central Bank, has previously indicated that bitcoin might address the challenges posed by the nation’s declining official currency.
Inclusion of Crypto in the New Legislation
According to a report by Bloomberg, lawmakers in Kenya are considering a 3% tax on the transfer or exchange of cryptocurrencies, while a 15% tax may apply to creators of monetized online content.
This initiative is part of a newly proposed bill aimed at stabilizing the financial situation of the nation. President William Ruto seeks to double tax revenues to 5 trillion shillings (approximately $37 billion) over the next five years, utilizing the proceeds to foster economic growth.
The legislation is expected to take effect at the start of July, pending approval from Kenyan lawmakers. The country anticipates generating around $21 billion in revenue during the first year (14% higher than the projected collections for the current fiscal year).
ADVERTISEMENT
Kenya is classified as a lower-middle-income economy, with more than 16% of its population living below the international poverty threshold. Economic disparity, health challenges, and governmental corruption are significant contributors to this adverse trend. Nevertheless, it remains one of the most advanced nations in eastern and central Africa.
Related Posts
Kenya: A Leader in African Cryptocurrency
Despite the financial challenges faced by the country, a considerable number of Kenyans have increasingly engaged with the cryptocurrency sector in recent years.
A study conducted by the United Nations (UN) in the summer of 2022 estimated that 8.5% of the population (over 4 million people) were HODLers, marking the highest adoption rate in Africa. South Africa (7.1%) and Nigeria (6.3%) followed in the rankings.
However, the UN was unable to ascertain the approximate value of digital assets owned by Kenyans due to the absence of comprehensive regulations in the sector:
“The returns from cryptocurrency trading and holding are, as with other speculative trades, highly individual. On balance, they are overshadowed by the risks and costs they pose in developing countries. The sector is not regulated in the country and remains largely unregulated even in the developed world.”
It is important to highlight that Kenya’s central bank maintains a relatively favorable view of bitcoin, unlike many other centralized financial institutions worldwide. Governor Njoroge suggested in 2021 that embracing the leading cryptocurrency could alleviate the financial distress that the region experienced following the COVID-19 pandemic.
“Our decision to shift to Bitcoin is both tactical and logical. Our currency has always been the punching bag for the IMF, which always claims that the Kenya Shilling is overvalued. This has led to too much pressure on the Kenyan Shilling, and this has a negative effect on the economy,” he stated.
SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
