Kenya to cut digital asset taxes in half

The current digital tax rate has been criticised for stifling innovation and discouraging investment.

Kenya.- The National Treasury of Kenya has announced its plan to slash digital asset transaction taxes from 3% to 1.5%, a move that could lower fees for users trading cryptocurrencies and NFTs.

Featured in the forthcoming Finance Bill 2025, the proposal would amend the Third Schedule of the Income Tax Act to adjust the rates.

Under the Income Tax Act, digital assets include intangible items of value, such as cryptocurrencies and digital tokens, that exist in digital form and represent exchangeable value.

The 3% digital asset tax, introduced in the Finance Act 2023, is levied on the gross fair market value of cryptocurrency transactions. According to a 2024 Global Crypto Adoption Index by Chainalysis, Kenya ranks fifth globally for peer-to-peer crypto transactions. 

The current digital tax rate has been criticised for stifling innovation and discouraging investment. With the proposal, the treasury aims to align the tax policy with global standards and ease the financial burden on digital asset traders. The change is also expected to position Kenya as a hub for fintech innovation. 

According to the treasury, the goal is to balance tax revenue generation with a regulatory environment that appeals to startups, entrepreneurs and investors.

If approved, the Finance Bill 2025 could position Kenya for digital finance success as it harnesses crypto technologies to boost financial inclusion and economic growth.

Industry stakeholders have welcomed the proposed tax cut. The Blockchain Association of Kenya believes the move will increase compliance and drive the formalisation of digital asset platforms. 

Kenya’s approach aligns with developments in Nigeria and South Africa, where regulators are initiating policies that balance crypto oversight with growth. Last month, the South African Revenue Service (Sars) warned crypto asset traders to register or face legal action.