The Kenya Revenue Authority (KRA) has confirmed that the upcoming Kenya Digital Service Tax (DST) will be applicable on cryptocurrencies.
Speaking during a Q&A session, a KRA representative confirmed that any company operating a cryptocurrency platform will be mandated to pay the 1.5% tax which takes effect beginning on January 1, 2020 and submitted via an online form.
Speaking during the online session, a KRA representative said:
“The world is getting more digital. We now have digital wallets. As the law is, any person who will be offering a digital service – crypto is digital, the platform is digital, the acquisition process is digital, the process of payment is digital – in that respect, DST will be applicable on cryptocurrencies.”
KRA also revealed that while discussions are still ongoing on how to tax cryptocurrencies – whether it should be subjected to capital gains tax, VAT, or income tax – the current regulation requires that platforms dealing in cryptocurrencies be subjected to digital service tax.
Interestingly, Kenyan platforms however have the option of claiming back their digital service tax at the end of the year since they also pay other taxes within the Kenyan jurisdiction.
This clarification now means that foreign P2P platforms like Paxful, Binance P2P, Local Cryptos, and Bitzlato, operating in Kenya, will now be required to remit a 1.5% tax to the Kenya government for their services.
Watch video above for details.
NB: BitcoinKE has reached out to these platforms to see how they intend to comply with this direction by the Kenya government and will publish their responses
Follow us on Twitter for latest posts and updates