Kenya Planning to Abolish 3% Digital Asset Tax Due to Crypto Lobbyist Influence
In a significant move for the Kenyan crypto industry, the 3% Digital Asset Tax (DAT) on cryptocurrency transactions has been repealed, paving the way for a new tax regime. The repeal, which is pending the President's assent, was a result of lobbying efforts by a coalition of Kenyan crypto stakeholders, according to the Kenyan National Assembly's finance committee chairman, Kuria Kimani.
The 3% DAT, introduced in September 2023, was widely criticised for its potential harmful effects on the digital asset economy and the risk of pushing users to decentralised platforms outside the country. In response to these concerns, Parliament repealed section 12F of the Income Tax Act, effectively scrapping the 3% digital asset tax.
Instead, Parliament introduced a new regime charging a 10% excise duty on transaction fees that exchanges collect from their users. This shift from a tax on the transaction amount to a tax on fees is intended to address the concerns raised by the crypto community.
Other tax changes relevant to digital and virtual assets include the reduction of the digital asset tax from 3% to 1.5% as initially proposed before the repeal, and the introduction of a 10% virtual asset services levy to regulate the digital economy more broadly. The Finance Act 2025 also emphasises respecting privacy rights by preventing unrestricted access to personal financial data and aligning tax rules with constitutional safeguards.
The repeal of the 3% DAT is a significant victory for the Kenyan crypto industry, and it is noteworthy that key figures such as Chebet Kipingor, Kenyan business operations manager at African crypto exchange Busha, and Keega Gachutha, cofounder of the Kenyan crypto on/offramp Swypt, were at the forefront of the lobby efforts against DAT. Kipingor has mentioned plans to form a Kenyan digital assets association to build on the successes of the coalition and better represent the Kenyan crypto collective in future obligations.
As of mid-2025, Kenya is moving closer to instituting more robust crypto regulations in the country, with a bill to regulate virtual assets and virtual asset service providers passing its second reading in parliament. The repeal of the 3% DAT and the introduction of the 10% excise duty on transaction fees collected by exchanges mark a significant adjustment aimed at balancing tax revenue with the growth and sustainability of Kenya’s crypto ecosystem.
- The 3% Digital Asset Tax (DAT) on cryptocurrency transactions in Kenya was recently repealed, paving the way for a new tax regime.
- The repeal was a result of lobbying efforts by a coalition of Kenyan crypto stakeholders, as noted by the Kenyan National Assembly's finance committee chairman, Kuria Kimani.
- In response to concerns about the 3% DAT's potential harmful effects on the digital asset economy, Parliament introduced a new regime charging a 10% excise duty on transaction fees collected by exchanges.
- Other tax changes relevant to digital and virtual assets include the reduction of the digital asset tax from 3% to 1.5% and the introduction of a 10% virtual asset services levy to regulate the digital economy more broadly.
- As Kenya moves closer to instituting more robust crypto regulations, a bill to regulate virtual assets and virtual asset service providers has passed its second reading in parliament.
- The Kenyan crypto industry views the repeal of the 3% DAT as a significant victory, with key figures such as Chebet Kipingor and Keega Gachutha at the forefront of the lobby efforts against DAT.
