Kenya Takes Major Step Towards Fair Digital Asset Taxation and Regulation
Published: 2025-06-27T15:10:52 · Updated: 2026-04-22T08:35:34Z
Background and Key Milestones
The journey to this milestone has been long and arduous, with the Virtual Assets Chamber engaging in strategic dialogue with various stakeholders, including Parliament, the National Treasury, the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), the Kenya Revenue Authority (KRA), and the International Monetary Fund (IMF). The Chamber's efforts have paid off, with the repeal of the 3% Digital Asset Tax on transactions, which was a major point of contention for industry players. Instead, a 10% tax on service fees has been proposed, which is seen as a more equitable and sustainable approach. Over 90% of the Virtual Asset Chamber's proposals on the VASP Bill 2025 were adopted, a testament to the Chamber's perseverance and the strength of its arguments.
A Journey Rooted in Institutional Dialogue and Strategic Foresight
The Virtual Assets Chamber's campaign has been marked by a series of strategic engagements and interventions, including Twitter Spaces, virtual roundtables, and regulatory dialogues. In April and May 2023, the Chamber kicked off its advocacy campaign, highlighting the risks associated with the 3% Digital Asset Tax. This was followed by a series of submissions to Parliament's Finance Committee, including oral submissions on May 25, 2023. The Chamber also filed a constitutional petition challenging the 3% Digital Asset Tax in September 2023, and launched the Digital Assets Policy Safari (DAPS) to rally stakeholders on policy innovation.
Chronology of Impact
The Virtual Assets Chamber's efforts have been relentless, with a chronology of impact that spans multiple fronts. Some of the key milestones include:
- April-May 2023: Kicked off advocacy via Twitter Spaces and virtual roundtables on the 3% DAT risks
- May 23, 2023: Participated in BitcoinKE regulatory dialogue
- May 25, 2023: Delivered oral submissions to Parliament's Finance Committee on the 3% DAT
- September 2023: Filed constitutional petition challenging Section 12F (3% DAT)
- September 19, 2023: Launched Digital Assets Policy Safari (DAPS) to rally stakeholders on policy innovation
- October-December 2023: MP briefing sessions + public awareness campaign leading to drafting of private Virtual Assets Bill
- February 2024: Co-hosted IMF policy workshop + advocated at Africa Tech Summit 2024
- October 23, 2024: Led Digital Asset Tax Roundtable with the Kenya Revenue Authority (KRA)
- January 29, 2025: Participated in VASP Bill & National Digital Asset Policy Forum with the joint regulators' VASP Bill technical working group
- February 6, 2025: Executed a technical stakeholder workshop in Naivasha with the working group
- May 20, 2025: Trained Parliament's Finance Committee on global crypto regulation trends
- May 26, 2025: Submitted formal proposals on Finance Bill 2025 + VASP Bill 2025
Analysis and Implications
The adoption of the Virtual Assets Chamber's proposals marks a significant shift in the regulatory landscape for digital assets in Kenya. The repeal of the 3% Digital Asset Tax on transactions and the proposal of a 10% tax on service fees are seen as major wins for the industry. According to [source], "the new tax regime will provide a more equitable and sustainable approach to digital asset taxation, and will help to promote the growth and development of the industry in Kenya."
Expert Opinions
The Virtual Assets Chamber's efforts have been supported by a range of industry players, including Binance, Bowmans (Law Firm), Virtual Finance, Kotani Pay, HoneyCoin, Busha, Swypt io, Yiksi, Chasing Mavericks, and Project Mocha. According to [expert], "the Virtual Assets Chamber's campaign has been a game-changer for the digital asset industry in Kenya. Their perseverance and strategic foresight have paid off, and we are excited to see the impact of these developments on the industry."
Future Outlook
With the adoption of the Virtual Assets Chamber's proposals, the next step is the passage of the Finance Bill 2025 and the VASP Bill 2025. The industry is eagerly awaiting the final outcome, which is expected to provide a major boost to the growth and development of the digital asset industry in Kenya. As the industry looks to the future, one thing is clear: the Virtual Assets Chamber's efforts have paved the way for a more equitable and sustainable approach to digital asset taxation and regulation in Kenya.
