- Crypto tax rate reduction to 1.5% in Kenya.
- Opposition from the Blockchain Association of Kenya persists.
- Potential shift to informal crypto markets expected.
Kenya’s government announced a reduction in the proposed digital asset tax rate from 3% to 1.5%, effective July 2025, despite substantial opposition from the local crypto industry.
Impact of the Finance Bill 2025
Kenya’s Finance Bill 2025 proposes changes to the digital asset tax regime. The Kenya Revenue Authority leads the implementation amid industry resistance. Industry leaders warn the tax could threaten Kenya’s fintech leadership and push users to unregulated channels.
“The Finance Bill 2025 represents our final battleground before catastrophic taxation policies permanently damage Kenya’s digital asset ecosystem…. The proposed 3% Digital Asset Tax threatens the very existence of our businesses and Kenya’s position as an African crypto hub.” — Blockchain Association of Kenya (BAK), Advocacy Group
The tax reduction aims to ease the burden on the crypto sector, yet local businesses fear harm to innovation and possible capital migration. The Supreme Court upheld these tax measures, affirming its implementation from July 2025.
Kenya’s digital asset firms expressed concerns about reduced trading activity and liquidity, as they anticipate users might lean towards informal channels. This tax threatens local fintech, driving developers and startups to more favorable jurisdictions.
The industry’s future hinges on balancing regulation with opportunity. Historical precedents indicate possible liquidity decline, emphasizing the need for protective measures for Kenya’s blockchain ecosystem to maintain relevance.
