Kenya classifies cryptocurrencies as digital assets under a regulated framework established by the Virtual Asset Service Providers (VASP) Act 2025 and various Finance Acts. This regulation means that Virtual Asset Service Providers must register and comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. The Kenya Revenue Authority (KRA) is the primary body overseeing crypto taxation. The tax framework treats crypto activities largely under existing income tax laws. For individuals, crypto income is taxed at progressive rates ranging from 10% to 30%. There is no separate capital gains tax for crypto, instead, gains from crypto transactions are treated as ordinary income and are subject to these same progressive rates. There is no reduced tax rate or benefit for holding crypto assets long-term. Corporate entities dealing in crypto are subject to the standard 30% corporate tax rate. While crypto transfers themselves are not subject to Value Added Tax (VAT), a 16% VAT may apply to services offered by VASPs. Both converting crypto to fiat currency and swapping one crypto for another are considered taxable events, triggering the calculation of gains. Specific crypto activities are also subject to tax. Staking rewards are taxed as ordinary income upon receipt. Mining operations are treated as a business, with rewards taxed as business income, expenses such as electricity and equipment can be deducted. Yields and farming gains from Decentralized Finance (DeFi) activities are also taxed as income, with each interaction potentially being a taxable event. Non-fungible tokens (NFTs) are classified as digital assets, and any gains from their sale are treated as ordinary income. Regarding recent developments, the Finance Act 2025, effective from 2025, replaced the previous 3% Digital Asset Tax. Instead, it introduced a 10% excise duty specifically on fees charged by Virtual Asset Service Providers.
Tax Rates
| Effective individual rate | 10 |
| Capital gains tax | Taxed as ordinary income 10-30%, no separate capital gains tax |
| Income tax on crypto | Progressive 10-30%, staking, mining, DeFi rewards treated as income |
| Corporate tax | 30% |
| VAT | No VAT on crypto transfers, 16% VAT may apply to VASP services |
Activity Taxes
| Staking | Taxed as ordinary income at receipt, no holding period benefit |
| Mining | Taxed as business income, electricity and equipment expenses deductible |
| DeFi | Yields and farming gains taxed as income, each interaction taxable |
| NFTs | Taxed as digital assets, sales gains treated as ordinary income |
Taxable Events
| Crypto → Fiat | Taxable upon conversion, gains realized at transaction time |
| Crypto → Crypto | Taxable swap, disposal triggers capital gain calculation and tax |
Holding Period
| Holding period benefit | None, no rate reduction for long-term holding |
Sources