Kenya’s tax authority will introduce a system to monitor crypto transactions in real time

What’s new? The Kenya Revenue Authority (KRA) is set to tighten its grip on cryptocurrency by introducing a real-time taxation system integrated with exchanges. This system, for tax collection purposes, will track all crypto transactions and record parameters such as the time and value of transactions. KRA also allows the introduction of artificial intelligence and machine learning to combat tax evasion.

Material by Business Daily

What else is known? According to officials, the current system cannot track cryptocurrency transactions, resulting in a significant loss of revenue to the state budget. They cited section three of the income tax law, under which cryptocurrency profits can be taxed.

Kenya is among the African countries with high use of cryptocurrencies. In addition to trading, Kenyans, like many Africans, use cryptocurrency to hedge against inflation and depreciation of the national currency.

In May, the Kenyan authorities presented a draft budget that would increase existing taxes and introduce new ones. The reason was the budget deficit and the growth of public debt above the IMF recommended limits, which does not allow obtaining financing. The initiative sparked mass protests across the country, which were supported by a number of industry associations and officials.

In June, deputies passed the bill, and although President William Ruto vetoed it, protesters stormed parliament and set it on fire, killing more than 50 people. The country then declared a state of emergency and the army was brought in to quell the protests.

The protesters demanded, among other things, the resignation of the president; on July 11, he announced the dissolution of the cabinet, while retaining his post.

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On July 19, a real-time crypto transaction monitoring system was launched by South Korea’s Financial Supervisory Service (FSS). It is designed to detect fraudulent activity.

Earlier this month, the South African Revenue Service began requesting user data from crypto exchanges. Those, for whom the audit has not yet begun, can participate in a voluntary disclosure program.

In turn, the UAE authorities abolished VAT on transfers and conversion of cryptocurrencies. The decision applies retrospectively, from January 1, 2018, and companies will be able to get a refund of previously paid fees.

In September, Turkish authorities refused to introduce a tax on crypto trading in the short term. At the same time, the regulator of Japan began to study the possibility of reducing the tax rate on crypto income.