Kenya’s Crypto Crackdown: New Taxes and Reporting Rules Shake Up Digital Finance

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Kenya’s Finance Bill 2026 tightens crypto reporting and digital payment taxes

Kenya’s proposed Finance Bill for 2026 includes plans to require cryptocurrency platforms to report more information and to tax digital payments. These changes aim to give authorities greater ability to collect taxes within the broader financial system.

Summary

  • Kenya’s Finance Bill 2026 would require Virtual Asset Service Providers to submit annual user and transaction reports to the Kenya Revenue Authority.
  • The proposal introduces new taxes on digital payments, including a 5% withholding tax on local card transactions and 16% VAT on some fintech services.
  • South Africa has separately proposed classifying crypto assets as “capital” under new foreign exchange rules, tightening oversight of cross-border digital asset flows.

A new bill in Kenya requires companies dealing with cryptocurrencies (Virtual Asset Service Providers) to report information about their customers and owners to the tax authority (Kenya Revenue Authority) each year, according to a report by KPMG Kenya.

The plan would enable Kenya to share information about virtual asset transactions with tax authorities in other countries, following international standards for reporting.

The bill also increases monitoring of digital finances by introducing new taxes on card payments and certain fintech services. Experts believe these changes could increase costs for companies that process payments, cryptocurrency platforms, and businesses that depend on online transactions.

The new Finance Bill also strengthens the Kenya Revenue Authority’s power to enforce tax rules during disagreements with taxpayers. This means that banks, savings groups (SACCOs), and mobile money services could be instructed to freeze or redirect a taxpayer’s funds – even if the taxpayer is already formally challenging the tax assessment – until the dispute is settled.

What crypto-related changes are included in the bill?

According to KPMG Kenya, the new Finance Bill broadens what counts as financial activity to include transactions involving virtual assets handled by crypto companies. This means these firms will need to strengthen their compliance procedures and report customer activity annually.

In addition to new reporting requirements, the proposal includes taxes on how digital payments are processed. Transactions using local cards would be subject to a 5% tax, while some payments made with cards from outside the country could be taxed at 20%. Certain fintech services would also be subject to a 16% value-added tax (VAT).

As a crypto investor, I’m seeing a global trend of governments wanting more visibility into our transactions. Here in Kenya, it looks like they’re updating regulations to improve tax collection and share information with other countries. According to Cliffe Dekker Hofmeyr, a tax advisory firm, this is all about tighter monitoring of where digital assets are going, and it’s something we’re seeing happen worldwide as regulators step up their game.

Across Africa, governments are increasing their regulation of cryptocurrencies. For example, South Africa is considering new rules that would treat crypto as a type of financial asset, bringing it under existing foreign exchange laws.

South Africa’s National Treasury and Reserve Bank announced proposed rules to better monitor cryptocurrency transactions crossing borders and prevent illegal money movement. The plan suggests that some crypto transfers might need to be reported or approved, depending on limits set by officials.

Why are businesses concerned about the proposals?

As a crypto investor in Kenya, I’m a little concerned about this new Finance Bill. From what I’m reading, it could really drive up costs for fintech companies, payment processors, and us crypto businesses. Basically, if it passes, companies that handle mobile payments, debit cards, or anything involving international transactions – which is pretty much everyone in the crypto space – might have to raise prices or change how they report things. It could add some extra hurdles to operating here.

This new law changes when taxes are due and asks businesses to share more information. Instead of having until June 30th, individual tax returns will now be due before April 30th. Also, the rules for VAT invoices are expanding – now, any business making taxable sales will need to follow these rules, not just those officially registered for VAT.

Proposed changes would affect how dividends are taxed within the East African Community and how lenders and leasing companies can deduct interest on loans. KPMG Kenya reports that these updates are part of a larger overhaul of the country’s tax system, as the government seeks to increase revenue during challenging economic times.

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2026-05-25 16:45