By Victor Lando - Senior Associate, Tax
The Finance Bill 2026 (“The Bill”) proposes a formal crypto reporting framework through new Sections 6C and 6D of the Tax Procedures Act.
What the Bill proposes
Section 6C requires Virtual Asset Service Providers (“VASPs”), such as crypto exchanges and trading platforms, to file information returns with the Kenya Revenue Authority (“KRA”) on users classified as “reportable users.” This applies to platforms facilitating crypto exchange transactions either as intermediaries or as counterparties.
A person who makes a false statement in an information return shall be liable on conviction to a fine of KES 100,000 for each false statement, or imprisonment for a term not exceeding 3 years, or both. There is also a penalty of KES 100,000 for omitting information that should be included in the information return. The Bill additionally includes a KES 1 million penalty for failing to submit a return. Even VASPs with no reportable users must file nil returns.
Section 6D creates the legal framework for international exchange of crypto-related tax information, aligning Kenya with the OECD’s Crypto-Asset Reporting Framework (“CARF”). This could eventually allow Kenya to receive data from foreign jurisdictions where Kenyan residents hold crypto accounts.
Impact
- If enacted, crypto exchanges will involve better customer identification checks, such as Know Your Customer ("KYC"), stronger reporting systems and improved tax compliance processes.
- Anonymous crypto trading may become harder. If enacted, exchanges could share users’ transaction details with the KRA, allowing the tax authority to compare the information with tax returns filed by users.
- The information-sharing mechanism per Section 6D could make it harder to avoid taxes across different countries, once Kenya signs information-sharing agreements with other governments.
Conclusion
This proposal creates the basis for taxing Kenya’s fast-growing digital asset sector. However, how well it works will largely depend on future regulations, especially rules on foreign crypto exchanges and who will be considered a reportable user.