Kenya set to scrap 3% digital asset tax after crypto lobbyist efforts

The Kenyan government has repealed the 3% digital asset tax (DAT) on the gross value of cryptocurrency transactions, pending presidential assent, Mariblock has learned.

According to the Kenyan parliament’s finance committee chairman, Kuria Kimani, the lobby activities of a coalition of Kenyan crypto stakeholders played a direct role in the rescinding of the tax regulation. 

Quick catch-up 

• In September 2023, Kenyan authorities instituted a controversial 3% digital asset tax (DAT) to be charged on the gross value of crypto transactions without regard for profit or loss. 
• It mandated crypto exchanges to collect and remit these taxes to the Kenyan Revenue Authority within a five-day window. 
• Several players in the Kenyan crypto ecosystem condemned the tax, claiming that it could potentially harm the country’s digital asset economy and drive users to decentralized, non-native platforms. 
• In April, Mariblock reported that a number of crypto exchanges in the country and other stakeholders in the Kenyan digital assets space were coming together to pool lobby efforts in opposition to DAT.  

The details 

• Last Thursday, the Kenyan National Assembly passed the 2025 finance bill into law. The bill now awaits President Ruto’s assent before it becomes gazetted and binding. 
• A major amendment in the finance bill is that section 12F of the Income Act, which stipulates the DAT, has been repealed, implying that the 3% tax is no longer in effect. 
• Instead, Kenyan lawmakers voted in favor of a 10% excise duty charged on transaction fees that exchanges collect from their users. 
• This excise-type tax is set to take effect instead of DAT, which has been loosely enforced since its inception nearly two years ago. 

The Kenya crypto collective’s lobbyist efforts 

• The chairman of the Kenyan National Assembly's finance committee, Kuria Kimani, said that the efforts of a group of Kenyan crypto firms and ecosystem players factored into the decision to scrap DAT. 
• Mariblock spoke to the cofounder of the Kenyan crypto on/offramp Swypt, Keega Gachutha, and African crypto exchange Busha’s Kenyan business operations manager, Chebet Kipingor.  
• These two individuals, who were at the forefront of the lobby efforts, explained the details of the campaign that culminated in the DAT’s amendment. 

According to Kipingor, the first advocacy efforts from stakeholders in the Kenyan crypto industry began in 2023, albeit in a less uniform and fragmented manner. 

• However, major stakeholders and companies decided earlier this year to pool efforts in a unified pushback to DAT by exploring policy dialogue with the Kenyan legislative arm. 
• Kipingor noted that a quick and unified opposition to DAT was necessary not just for the country but for East Africa in general, especially as other countries in the region often mirror Kenyan policies. 
• She said: 

“We quickly realized that what is happening in Kenya in terms of regulation is not just impacting Kenya alone but the wider industry. We've seen Rwanda and Tanzania and even Uganda closely following what Kenyan regulators are doing ... Tanzania literally just copy-pasted what our government did without understanding how harmful the 3% tax was.” 

Another blockchain association still to come

• Gachutha, who presented the coalition’s case before the Kenyan parliament alongside PwC, highlighted the contributions of other crypto firms such as HoneyCoin, Luno and GoChapaa to the lobbying efforts. 
• According to him, the team interfacing with the Kenyan parliament met periodically with the broader Kenyan crypto ecosystem players on a social media group where updates were shared. 
• In addition, Gachutha mentioned plans to form a Kenyan digital assets association to build on the successes of the coalition and better represent the Kenyan crypto collective in future obligations. 

Zoom out 

• Kenya is moving closer to instituting more robust crypto regulations in the country. 
• Last year, the Kenyan government mentioned plans to regulate cryptocurrencies and virtual assets amid its greylisting by the Financial Action Task Force (FATF). 
• In January, it issued draft crypto regulations —a policy document that usually precedes the establishment of actual rules— and asked for public input. 
• Yesterday, a bill to regulate virtual assets and virtual asset service providers in the country passed its second reading in parliament.