Kenya’s Crypto Tax U-Turn: No New Taxes, But Stricter Rules and Higher Costs Loom

by

Kenya Moves to Calm Crypto Tax Fears as Finance Bill Debate Grows

Key Highlights

  • Kenya denied plans for new crypto taxes on crypto holding but proposed stricter reporting rules and higher compliance costs for exchanges.
  • Finance Bill 2026 proposes a 10% excise duty on crypto service fees, raising concerns over higher trading costs in Kenya.
  • Binance account freezes and new crypto regulations are fueling frustration among Kenyan traders amid economic pressure.

Kenya’s government addressed public worries about the Finance Bill 2026, clarifying that reports of new taxes on cryptocurrency were incorrect. Treasury Secretary John Mbadi stated that the bill’s focus is on ensuring cryptocurrency owners properly report their holdings and follow tax laws as the crypto industry grows in Kenya.

These comments were made as protests grew in Nairobi and other cities, fueled by worries about taxes, online payments, financial technology, and cryptocurrency trading.

Following the release of government explanations about new financial plans, Mbadi explained in a press conference that the government aims to clarify rules for digital asset transactions while ensuring everyone pays their fair share of taxes. He stated the proposed changes would focus on better record-keeping and reporting requirements.

The Finance Bill still proposes a 10% tax on fees charged by cryptocurrency service providers, which could make it more expensive for crypto exchanges to operate in Kenya.

Crypto industry faces rising compliance pressure

As a researcher following developments in Kenya, I’ve been looking into proposed changes to taxation that could significantly impact businesses. The government is considering doubling the excise duty on betting companies from 5%. What’s particularly interesting is that this also affects crypto firms. The new Finance Bill proposes a hefty KSh 150 million licensing fee just to *start* offering services, plus an annual renewal fee of KSh 2 million. This represents a considerable financial hurdle for digital asset companies operating in, or looking to enter, the Kenyan market.

The plan would also require cryptocurrency exchanges to send yearly reports about their customers and transactions to the tax authority. Experts in the industry are concerned that increased costs and stricter rules could cause some crypto companies to move to countries with more welcoming regulations. As a result, Kenya could see slower growth in blockchain investment and digital asset trading, potentially losing its position as a leading regional center.

The new proposals are worrying many in the financial technology sector. Companies that handle payments, like banks and processors, might increase their fees to cover the cost of complying with these changes. This could mean higher prices for digital payments, money transfers, and online purchases for people and businesses in Kenya.

Binance freeze controversy deepens public frustration

Binance, a major cryptocurrency exchange, is receiving criticism in Kenya after it blocked access to several user accounts. This action followed requests from the Directorate of Criminal Investigations, but some traders report they haven’t been given official reasons for the restrictions, such as specific charges, court orders, or an estimated timeframe for resolution.

One user reported that they received no explanation for their account being frozen, with no complainant or timeframe provided. Binance has told affected customers to reach out to Kenyan police for more details.

The main issue is that we don’t know who made the complaint, no official accusations have been filed, and there’s no clear timeframe for resolution. As a result, funds are still unavailable. This is causing significant hardship, as everyday expenses continue to mount and debt is increasing. This isn’t simply a matter of following rules – someone’s ability to earn a living is currently at stake.

— Yoko (@Kibet_bull) April 20, 2026

The exchange is partnering with the AML Association of Kenya to host a discussion on X Spaces next week. Comedian Eddie Butita will lead the session, focusing on issues related to complying with regulations and resolving problems with accounts that have been frozen. This comes as many Kenyan traders, facing economic hardship, are turning to cryptocurrency trading and are becoming increasingly frustrated with the current situation.

Read More

2026-05-25 20:50