Kenya’s Crypto Tax Shift: What 10% Excise Duty Means for Digital Finance
Earlier this year, the Kenyan Revenue Authority (KRA) introduced a significant change to how digital asset transactions are taxed. Moving away from a 3% Digital Assets Tax (DAT), the KRA, under the Finance Act 2025, has now implemented a 10% excise duty on cryptocurrency transactions. This pivotal shift, set to take effect from July 1st, 2025, aims to redefine Kenya’s approach to taxing the burgeoning crypto sector, sparking diverse reactions among local tax experts and industry players in the vibrant African tech ecosystem.
Understanding the Impact: A Lighter Burden on Crypto Traders
Crucially, the new 10% excise duty applies specifically to the fees levied by crypto exchanges, digital wallets, and other Virtual Asset Service Providers (VASPs) operating within Kenya. This is a critical distinction, as the duty does not target the overall value of a crypto transaction but rather the service charges incurred. This targeted approach dramatically reduces the financial obligation for crypto traders in the country, effectively lessening the tax burden by more than 96% compared to the previous model. Kenyan tax experts view this as a more pragmatic and growth-oriented measure. CPA Michael Wachinga, a Senior Manager at PwC Kenya, articulated this positive sentiment to Techpoint Africa, stating, “The Kenyan crypto industry has responded positively, seeing the change as more logical and supportive of growth. While challenges remain around enforcement, the shift signals Kenya’s intent to become a serious player in digital finance.” Wachinga, who recently shared insights during a webinar organised by the Kenyan Digital Assets Chamber, emphasized how this revised tax framework is perceived as a step towards fostering a more conducive environment for digital asset innovation and adoption across the African tech landscape.
The transition from a broad Digital Assets Tax to a focused excise duty on service fees marks a strategic evolution in Kenya’s regulatory stance on cryptocurrencies. This change not only significantly eases the tax burden on individual traders but also projects Kenya’s ambition to cultivate a robust and serious digital finance ecosystem. While the industry acknowledges potential enforcement challenges, the overall consensus points to this move as a logical and supportive step, positioning Kenya as a forward-thinking player in the continent’s rapidly expanding digital economy.
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