Kenya’s Finance Bill 2026 proposes sweeping new rules for the crypto and digital payments sector, requiring Virtual Asset Service Providers (VASPs) to file annual reports with the Kenya Revenue Authority (KRA) and introducing fresh taxes on card transactions and fintech services.
Under the bill, crypto firms must submit detailed returns covering reportable users and controlling persons, while also implementing systems to track transactions for tax purposes. The legislation further permits Kenya to exchange virtual asset data with foreign tax authorities under international frameworks.
The tax measures include a 5% withholding tax on local card transactions, a 20% levy on some non-resident card payments, and a 16% VAT on select financial technology services. These changes are expected to raise operating costs for payment processors, fintech companies, and businesses dependent on digital payments.
Additionally, the Kenya Revenue Authority gains broader enforcement power—banks, SACCOs, and mobile money providers may receive agency notices even after a taxpayer objects, potentially freezing or redirecting funds during unresolved disputes.
In South Africa, a parallel regulatory shift is underway: the Draft Capital Flow Management Regulations for 2026 would classify crypto assets as “capital” for the first time, imposing declarations or approvals on certain cross-border crypto transfers to curb illicit financial flows.
