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Kenya scraps 3% crypto transaction tax, adopts fee-based excise duty

Kenya scraps 3% crypto transaction tax, adopts fee-based excise duty

June 27, 2025
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Home Cryptocurrency

Kenya scraps 3% crypto transaction tax, adopts fee-based excise duty

Abimbola Samuel by Abimbola Samuel
June 27, 2025
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Kenya scraps 3% crypto transaction tax, adopts fee-based excise duty

Kenya scraps 3% crypto transaction tax, adopts fee-based excise duty

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Kenya’s Parliament has repealed the three percent Digital Asset Tax (DAT) on cryptocurrency transactions and replaced it with a 10 percent excise duty on service fees charged by exchanges.

The bill was passed under the Finance Bill 2025, which is Kenya’s approach to digital asset regulation. It followed intense lobbying by crypto stakeholders and was based on the high adoption of crypto in the East African nation.

Kenyan crypto firms reject 2023 tax policy

In 2023, Kenya implemented a three percent tax on the total value of every cryptocurrency transaction, be it buying, selling, or transferring, regardless of whether the user made a profit.

Then, the country’s crypto community criticised the move, calling it unfair and likening it to taxing cash deposits in conventional banks.

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They warned that the levy could stifle innovation, push users toward offshore platforms, and weaken Kenya’s growing reputation as a leading fintech hub in Africa.

Therefore, Kenyan crypto firms, including Swypt, Busha, HoneyCoin, and Luno, enlisted PwC, a global accounting and professional services firm, to enhance their case before Parliament.

Keega Gachutha of Swypt and Chebet Kipingor of Busha led the coalition, emphasising that the tax harmed Kenya and neighbouring economies like Rwanda and Tanzania, which often mirror Kenyan policies.

The lobbyists pointed out that the tax had been loosely enforced since its introduction in 2023, with many traders choosing not to comply. Their sustained advocacy led to an amendment of the Finance Bill, which initially suggested cutting the Digital Asset Tax to 1.5 percent, before scrapping it altogether.

Furthermore, Kuria Kimani, the Finance and National Planning Committee Chairperson, defended the repeal, stating, “This is the equivalent of being taxed for depositing money in your bank. We are now aligning digital-asset taxation with conventional financial services by basing it on fees rather than transaction amounts.”

The new 10 percent excise duty will apply only to exchange service fees, reducing costs for traders.

Beyond taxation, Kenya is advancing comprehensive crypto regulations. The draft Virtual Asset Service Providers Bill 2025 and National Policy on Virtual Assets outline licensing, consumer protection, and anti-money laundering measures. The Central Bank of Kenya (CBK) and Capital Markets Authority (CMA) will jointly oversee the sector, with stablecoins recognised as payment instruments.

Yellow Card, a stablecoin infrastructure firm, praised the move: “Kenya is bridging the gap between digital assets and national payment systems.”

The CBK and CMA, historically cautious, now appear supportive in contrast to past warnings against unlicensed crypto services.

What’s next for Kenya’s crypto economy?

The Finance Bill 2025 proceeds to the Senate before presidential approval, with the excise duty expected next fiscal year. Meanwhile, the crypto industry anticipates licensing guidelines and forming a Kenyan Digital Assets Association to further advocate for sector-friendly policies.

By removing the levy, Kenya signals its ambition to foster innovation while protecting users. This balancing act could position it as Africa’s next crypto hub.

Tags: DAXDigital Asset TaxFinance Bill 2025Kenya
Abimbola Samuel

Abimbola Samuel

Experienced crypto writer with 2+ years of expertise. Skilled researcher and analyst delivering high-quality articles. Providing insightful perspectives on the latest crypto trends.

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