Cryptocurrency adoption in Africa is one of the most important achievements of this industry. What started as a volatile trend in 2019 continues and more and more African countries are adopting digital currencies. Due to the rapid development of the industry in this region, the regulations also had to be improved. Kenya announced a 1.5% tax on all crypto services.
1.5% tax on crypto services
In August, the Kenya Revenue Authority (KRA) announced new rules for “digital markets”. As the local information medium Bitcoinke reported at the time, the new regulations were to introduce a tax of 1.5 percent. on the gross transaction value that would be imposed on exchanges and other entities.
However, these rules were quite vague. As in last October, the US Internal Revenue Service (IRS) travel regulations contained unclear definitions of key terms. This made it difficult to understand whether some industry players would have to pay new taxes.
Nixon Omondi, a tax expert at KRA, has confirmed to Bitcoinke that the tax will apply to all cryptocurrency service providers in the country.
“Since the law is that anyone who will offer a digital service – the cryptocurrency is digital, the platform is digital, the acquisition process is digital, the payment process is digital – in this respect, DST will apply to cryptocurrencies.”
Omondi added that the new tax applies to both domestic and foreign entities. However, local companies can file their tax claims at the end of the year as they will have to pay other taxes as well according to national law. On the other hand, foreign entities will have to remit their taxes once a month.
Cryptocurrency taxes in Switzerland
As reported at the beginning of September, residents of Crypto Valley and companies operating in the Zug Canton of Switzerland will be able to pay taxes in cryptocurrencies. Taxes will be paid in Bitcoin and Ethereum, and will cover up to 100,000 Swiss francs ($ 109,670). The Canton of Zug currently has approximately 127,000 inhabitants. The new tax initiative was brought to life thanks to a collaboration between the government and Bitcoin Suisse AG, a leading cryptocurrency brokerage company.