The Capital Markets (Amendment) Bill, 2023, which defines crypto assets as securities and proposes capital gains tax on them, has gained approval from the National Assembly’s Finance and National Planning Committee in Kenya. The bill, chaired by Molo MP Kimani Kuria, seeks to amend the Capital Markets Act to regulate cryptocurrency trading, addressing concerns related to crime and terrorism financing.
If the bill is approved by the lower chamber of Parliament and the President, it will become law, providing a framework for governing cryptocurrency trading in Kenya. The legislative proposal emphasizes the need for regulation, considering the increasing number of Kenyans engaging in cryptocurrency transactions.
Additionally, the proposed bill, sponsored by Mosop MP Abraham Kirwa, introduces taxation measures for cryptocurrency transactions. If enacted, Kenyans involved in cryptocurrency transactions will be required to pay capital gains to the Kenya Revenue Authority based on the increased market value of their digital assets.
The bill outlines specific provisions for digital currency transactions, covering creation through crypto mining, regulations for trading, taxation protocols, ownership rules, and measures to promote innovation. It also acknowledges the environmental impact of digital currency generation and mining.
Kirwa emphasizes the importance of embracing cryptocurrencies, stating that it is the future of transactions. He urges Kenya to take a proactive approach, citing the success of mobile money adoption through M-Pesa. The bill aims to address challenges posed by the largely unregulated nature of the global cryptocurrency sector, mandating transparency by requiring individuals to provide specific information to the Capital Markets Authority for taxation purposes. This includes details such as the amount of virtual currency in Kenyan shillings, type of virtual currency, acquisition date, and sale date, promoting transparency in digital currency transactions.
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