Kenya’s National Treasury has announced its intention to lower taxes on crypto assets. The proposal, introduced in the upcoming Finance Bill 2025, marks a strategic pivot designed to encourage innovation and position Kenya as a leading fintech hub in Africa.
From Harsh Levy to Progressive Taxation
Under the current framework introduced in 2023, Kenyan crypto holders face a 3% Digital Asset Tax on the transfer or exchange of cryptocurrencies and other digital assets. Industry stakeholders have long argued that the tax burden has stifled innovation, discouraged investment, and driven activities into the informal economy.
The Treasury’s new proposal recommends cutting the tax rate to 1.5%, aligning it closer to international benchmarks and reducing the financial strain on businesses and individuals engaged in digital asset trading. According to Chainalysis’ 2024 Global Crypto Adoption Index, Kenya ranks fifth globally for peer-to-peer crypto transactions — underscoring the growing importance of this sector in the nation’s digital economy.
Boosting Adoption and Regulatory Clarity
Treasury officials have emphasized that the objective is to strike a balance: generating tax revenue while fostering a regulatory environment that does not deter startups, entrepreneurs, and investors. The Blockchain Association of Kenya (BAK) has praised the proposed reduction, citing its potential to boost compliance and encourage formalization of digital asset platforms.
Kenya’s move mirrors trends seen in Nigeria and South Africa, where regulators are softening stances to accommodate growing crypto adoption while ensuring oversight against fraud and money laundering.
If the Finance Bill 2025 passes, Kenya could bolster its reputation as a regional leader in digital finance, leveraging crypto technologies to enhance financial inclusion and economic growth.
