Kenya’s Finance Bill 2026 tightens crypto reporting and digital payment taxes

Kenya’s Finance Bill 2026 has proposed new reporting obligations for crypto platforms and fresh taxes on digital payments as authorities move to expand tax collection powers across the financial sector.

According to an analysis published by KPMG Kenya, the bill introduces measures requiring Virtual Asset Service Providers to file annual returns with the Kenya Revenue Authority containing details on reportable users and controlling persons.

The proposal would also allow Kenya to exchange virtual asset transaction information with foreign tax authorities under international reporting frameworks.

At the same time, the bill expands oversight of digital financial activity through new taxes targeting card transactions and some fintech services. Analysts reviewing the proposal said the changes could raise operating costs for payment firms, crypto platforms, and businesses that rely heavily on digital transactions.

Meanwhile, the Finance Bill also gives the Kenya Revenue Authority broader enforcement authority during tax disputes. Under the proposed framework, banks, SACCOs, and mobile money providers could receive agency notices even after taxpayers have formally objected to assessments, allowing funds to be frozen or redirected while disputes remain unresolved.

What crypto-related changes are included in the bill?

KPMG Kenya’s analysis stated that the Finance Bill expands the definition of reportable financial activity to include virtual asset transactions handled by VASPs. Crypto firms would therefore be required to maintain additional compliance systems and provide annual disclosures tied to customer activity.

Alongside the reporting obligations, the proposal introduces new taxes on digital payment infrastructure. Local card transactions would face a 5% withholding tax under the bill, while some non-resident card transactions could attract a 20% withholding tax. Certain financial technology services would also become subject to a 16% VAT charge.

According to tax advisory firm Cliffe Dekker Hofmeyr, the measures form part of Kenya’s attempt to strengthen tax enforcement and improve information sharing with foreign jurisdictions. The firm noted that virtual asset reporting standards are increasingly being adopted globally as regulators seek tighter monitoring of digital asset flows.

Elsewhere in Africa, regulators are also moving toward stricter crypto oversight. In South Africa, the National Treasury’s Draft Capital Flow Management Regulations for 2026 proposed classifying crypto assets as “capital” under foreign exchange laws for the first time.

A joint statement from South Africa’s National Treasury and Reserve Bank said the draft rules are intended to close gaps involving cross-border crypto transactions and illicit financial flows. According to the proposal, certain crypto transfers may require declarations or approvals depending on thresholds set by authorities.

Why are businesses concerned about the proposals?

Financial analysts cited in local coverage said the Finance Bill could increase compliance costs for fintech companies, payment processors, and crypto-related businesses operating in Kenya. Companies that rely on mobile payments, debit cards, and international transaction infrastructure may need to adjust pricing or reporting systems if the measures are approved.

The bill also shortens tax filing timelines and introduces additional disclosure requirements for businesses. Ordinary tax returns would be due before April 30 instead of June 30, while VAT invoicing obligations would extend beyond registered VAT businesses to entities making taxable supplies.

Further changes would alter dividend withholding rules within the East African Community and revise interest deduction treatment for lenders and leasing firms. According to KPMG Kenya, the proposals are part of a wider restructuring of the country’s tax administration framework as authorities look for additional revenue sources during a period of economic pressure.