Content creators, crypto traders, and other players in Kenya’s fast-growing digital economy could soon breathe a sigh of relief if the Finance Bill 2025 sails through Parliament in its current form.
The proposed bill seeks to slash the Digital Asset Tax from 3 percent to 1.5 percent, a move hailed by analysts and industry stakeholders as a significant step towards supporting innovation and formalizing the sector.
The Digital Asset Tax was introduced in the Finance Act 2023 and applies to income earned through the transfer or exchange of digital assets—including cryptocurrencies, non-fungible tokens (NFTs), tokenized assets, and blockchain-based work.
While the tax was intended to bring digital transactions into the tax net, it quickly drew criticism for being punitive and stifling growth in a nascent but promising sector.If enacted, the 2025 proposal to halve the rate will mark a major shift in Kenya’s fiscal policy toward digital finance and innovation.“The reduction to 1.5 percent shows the government is listening to the concerns of digital entrepreneurs and tech innovators. It’s a welcome move that aligns with the broader goal of building a competitive, inclusive digital economy,” said tech policy analyst Michael Otieno.
Industry players had warned that the original 3 percent tax was driving local creators and digital entrepreneurs to offshore or informal platforms, undermining tax compliance and discouraging investment in emerging technologies.
The revised rate, advocates say, strikes a better balance between revenue collection and fostering innovation.For Kenyans earning from NFT artwork, crypto trading, gaming, digital consultancy, and blockchain-based gig work, the proposed tax cut could reduce their financial burden, encourage transparency, and legitimize their income streams.
It also opens up the possibility of more inclusive participation in the global digital economy.“This policy shift could bring more digital workers into the formal tax net and help regularize the sector without overregulating it at a fragile stage of development,” said fintech entrepreneur Linda Wambui.
The Finance Bill 2025 also reflects growing recognition by policymakers of the transformative potential of blockchain and decentralized technologies in areas such as finance, governance, and supply chain management.
As Kenya continues to position itself as a regional tech hub, the proposed tax reduction is seen as a crucial enabler of digital entrepreneurship and innovation.
The Finance Bill is currently under review and will be subjected to public participation before being debated in Parliament. If approved, the new tax rate could take effect at the start of the next financial year.
