Industry players say the reform brings fairness, clarity, and alignment with global best practices.
Under the Finance Act 2025, the government has repealed the 3% Digital Asset Tax (DAT), previously imposed on the total value of cryptocurrency transactions, and replaced it with an excise duty on platform fees and commissions charged by licensed digital asset operators.
The shift means that crypto exchanges and brokers will now be taxed based on the service fees they charge users, not on the entire value of their trades.
For individuals and firms, income tax or capital gains tax will continue to apply, depending on how their digital assets are used or held.
“The repeal of the Digital Asset Tax and the introduction of excise duty on service fees is a more practical and fair approach, it recognises how our business models actually work,” said Philip Chege, Chief Marketing Officer at GoChapaa, a Kenyan digital finance startup.
Chege revealed that representatives from the blockchain industry recently engaged with the Kenya Revenue Authority (KRA) to help shape the new taxation framework.
“It was encouraging to see open dialogue between regulators and industry stakeholders. That kind of collaboration is what will move this space forward,” he added.
The Virtual Asset Service Providers (VASP) Act, which came into effect this year, now requires all crypto firms to register with the Central Bank of Kenya (CBK), maintain local offices, conduct Know Your Customer (KYC) checks, and include Kenyan representation on their boards.
The Act also enforces stringent anti-money laundering (AML) and counter-terrorism financing (CTF) standards, in line with guidelines from the Financial Action Task Force (FATF).
Analysts say these policy reforms reflect Nairobi’s broader ambition to formalise oversight of digital assets while ensuring a fair revenue collection process.
Kenya ranks third in Africa for cryptocurrency use and first in peer-to-peer transaction volumes, according to Chainalysis, underscoring its growing role as a regional hub for cryptocurrencies.
“Kenya has a chance to lead in building a fair, transparent digital asset ecosystem.
“With taxation and regulation now taking shape, we can finally focus on innovation, compliance, and expanding access to digital finance across the region,” Chege said.
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