From Citizen Digital
The group, led by platforms such as Busha, Kotani Pay, Luno, Swypt, HoneyCoin, and DurraFx, called for the repeal of Section 12F of the Income Tax Act, which introduced a specialised digital asset tax.
The stakeholders argue that the current regime is burdensome, fails to recognise market volatility, and risks double taxation.
Instead, they propose integrating digital assets into the standard property tax framework under the Eighth Schedule of the Income Tax Act, ensuring equal treatment through Capital Gains Tax or business income provisions. Additionally, they want Virtual Asset Service Providers (VASPs) recognised as financial institutions for VAT and Excise Duty purposes, allowing them to benefit from tax exemptions similar to traditional banks.
“Technology thrives or dies on the altar of law and policy. We seek regulation based on services provided, not the underlying technology,” said Keega Gakuua, Managing Partner at Keega & Co Advocates.
The proposals come at a time when digital asset use is surging among Kenyan youth aged 18–40, who are leveraging platforms like Binance and Aza Finance for investing and remittances.
“Smart regulation has fueled crypto adoption in Nigeria. Kenya can do the same with the right framework” Busha’s Chebet Kipingor added,
Kotani Pay CEO Felix Macharia noted that clear and inclusive regulations are critical for Kenya to lead Africa in blockchain innovation.
“As Silicon Savannah, we must support responsible tech growth and investor protection,” he said.
The submission aims to foster innovation, ensure tax neutrality, and align with global best practices while supporting fiscal responsibility.
The National Assembly is expected to review the proposals as part of the 2025 Finance Bill deliberations. If adopted, Kenya could position itself as a regional hub for blockchain and crypto innovation, driving financial inclusion and attracting global investment.
