KRA Enforces 10% Excise Tax on Cryptocurrency Transaction Fees under Finance Act 2025
KRA introduces 10% excise tax on VASPs’ transaction fees as per Finance Act 2025. Crypto companies in Kenya will now be taxed on the fees they charge for transactions.
KRA has issued a public notice stating that charges related to virtual asset transactions are now excisable services. This formalizes the government’s intention to bring crypto services under a stricter tax regime.
VASPs Bill 2025
The announcement comes as the country is preparing to pass the Virtual Asset Service Providers (VASPs) Bill 2025. This law will establish a framework to regulate and license businesses in the virtual assets sector.
Under the new rules VASPs will be required to get licenses from Central Bank of Kenya (CBK) or Capital Markets Authority (CMA) depending on the service type. CBK will oversee digital wallets while CMA will regulate investments, exchanges, token issuance platforms and initial coin offerings (ICOs).
Additional requirements will require VASPs to have a physical office in Kenya and increase their boards to at least 3 individual directors. The rules will also impose stiff penalties – up to KSh 3 million for individuals and KSh 10 million for companies – for misleading marketing. All VASPs will also have to comply with the Data Protection Act 2019.
Kenya’s First Digital Token
In a separate development, the government has expressed support for digital assets with the launch of the Kenyan Digital Token (KDT), a privately developed token on the Solana blockchain.
Speaking during the KDT launch on July 11, 2025, Cabinet Secretary for Information, Communications and the Digital Economy William Kabogo said Kenya wants to lead in blockchain innovation, stablecoin development and potentially build national Bitcoin reserves.
Kabogo described KDT as a low cost, scalable solution aligned to national objectives for digital inclusion and reduced transactional latency. He said Kenya trades over KSh 64.6 billion ($500 million) in digital assets monthly, 28th globally and 4th in Africa for crypto adoption.
The launch of KDT is a milestone in legitimizing digital finance in Kenya. The government has pledged to support innovators, consumer protection and access to international markets through blockchain growth.
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KRA Enforces 10% Excise Tax on Cryptocurrency Transaction Fees under Finance Act 2025