Earlier in the year, the Kenyan Revenue Authority (KRA) replaced a 3% Digital Assets Tax with a 10% excise duty on all crypto transaction fees under the Finance Act 2025.
The subsequent 10% excise duty, effective from July 1st, 2025, applies only to fees charged by crypto exchanges, wallets, and Virtual Asset Service Providers (VASPs) in Kenya.
The new excise duty applies only to transaction fees, not the total transaction value, reducing the tax burden by over 96% for crypto traders in the country.
“The Kenyan crypto industry has responded positively, seeing the change as more logical and supportive of growth. While challenges remain around enforcement, the shift signals Kenya’s intent to become a serious player in digital finance,” CPA Michael Wachinga, Senior Manager, PwC Kenya, told Techpoint Africa.
Wachinga, who was a guest speaker on a webinar organised by the Kenyan Digital Assets Chamber titled “Kenya’s New Crypto Tax Explained from 3% DAT to 10% Excise duty — What’s Changing and What you need to know,” explained that the new crypto tax rule was geared towards opening up the Kenyan crypto market and positioning it as a serious player.
The Kenya Revenue Authority (KRA) requires platforms to collect and remit the new tax by the 20th of the following month, mandating local bank accounts or tax representatives for compliance.
The development is the latest in Kenya’s crypto regulatory landscape, signalling a shift to pro-crypto policies by relevant authorities.
Repealed 3% digital assets tax
In June, the Kenyan government repealed its previous 3% Digital Assets Tax (DAT) on the gross value of cryptocurrency transactions pending full assent by the president.
Kuria Kimani, Chairman of the Kenyan parliament’s finance committee, revealed that the repeal was a result of serious lobbying by Kenya’s key crypto stakeholders.
The 3% Digital Assets Tax (DAT), instituted in September 2023, mandated that all crypto exchanges in the country collect and remit the tax within a five-day window.
Kenyan crypto stakeholders rallied and lobbied against the 3% Digital Assets Tax, forcing lawmakers to amend Section 12F of the Income Act, stipulating that the DAT has been repealed in the new Finance Bill passed into law.
Chebet Kipingor, Kenya’s Business Operations Manager for African Crypto Exchange Busha, was one of the stakeholders who lobbied the Kenyan government for the reversal of the 3% DAT.
Speaking to Mariblock in June, Kipingor explained the rationale behind their lobbying effort and why stakeholders needed to act fast.
“We quickly realised that what is happening in Kenya in terms of regulation is not just impacting Kenya alone, but the wider industry. We’ve seen Rwanda and Tanzania and even Uganda closely following what Kenyan regulators are doing…Tanzania literally just copied and pasted what our government did without understanding how harmful the 3% tax was.”
The 3% DAT was repealed alongside the passage of the controversial finance bill, which sparked nationwide protests across major cities in the East African country.
10% excise duty on crypto transaction fees
Following the repeal of the 3% DAT on the gross value of crypto transactions, lawmakers in Kenya voted in favour of a 10% excise duty charged on transaction fees that exchanges collect from their platform users.
The Kenya Revenue Authority (KRA) issued a public notice listing “fees charged on virtual asset transactions by virtual asset providers” as an excisable service in line with the Finance Act 2025, Tuko.co.Ke reported.
The development shifted the tax burden from crypto end-users in Kenya to exchanges and Virtual Asset Service Providers (VASPs), encouraging crypto adoption in the country.
“Kenya’s government replaced the 3% Digital Asset Tax with a 10% excise duty on service fees to make crypto taxation fairer and more sustainable. The goal is to ease compliance, encourage innovation, and better integrate digital assets into the financial system,” Wachinga said, explaining the impact of the new law on Kenya’s crypto landscape.
The 10% excise duty law comes into effect as the country prepares to sign the Virtual Asset Service Providers (VASPs) Bill 2025, which is geared towards establishing a legal framework for the regulation and licensing of players in the Kenyan virtual assets industry.
Current crypto regulatory landscape in Kenya
The repeal of the 3% DAT and the establishment of a 10% excise duty on crypto transaction fees by VASPs signal a major shift in Kenya’s approach to crypto regulation.
The current landscape morphed from a sceptical and extractive broad view to gradual acceptance and structured oversight by the relevant authorities.
The repeal of the 3% DAT was followed by the submission of the National Treasury’s Virtual Asset Service Providers (VASP) Bill 2025 to the National Assembly, mandating licensing for crypto exchanges and wallet providers by the Central Bank of Kenya (CBK) and Capital Markets Authority (CMA).
Additionally, a national policy on virtual assets, known as the Draft National Policy on Virtual Assets, was opened for public feedback with emphasis on the core areas of the Kenyan digital landscape, like consumer protection, anti-money laundering (AML), and cybersecurity.
As of today, Kenya has approximately 733,300 cryptocurrency users, reflecting a 13.4% adoption rate. The impressive cryptocurrency adoption is driven by mobile platforms and peer-to-peer (P2P) trading.
The daily crypto transaction volume stands at approximately $1.37 million (KSh 177 million), with stablecoins like USDT leading due to their use in remittances and cross-border payments.
Kenya’s new crypto tax law is a significant shift towards a structured regulatory framework, which until now has remained a major challenge to crypto adoption in Africa.
