Kenya Implements Real-Time Crypto Tax Monitoring-Nigeria to Follow?

The Kenyan Revenue Authority (KRA) has implemented a new real-time crypto tax monitoring system in the country. The East African country is one of the fastest-growing adopters of the crypto revolution but there was a concern among authorities that the new sector may result in increased tax evasion. The new automated system is the next step towards taxing the major emerging sector. 

The move was hailed by sections of the crypto community in Africa and could lead to other countries like Nigeria following suit with live systems of their own. The new tax system will record necessary transactional data including the value of each transaction in real time in local fiat currency so that accurate tax reporting can be achieved. KRA is also looking to improve tax reporting by using Artificial Intelligence (AI) and other cutting-edge technologies. 

Why are African Countries Leading Crypto Adoption Statistics?

According to reports, the Kenyan users posted engaged in a whopping 2.4 trillion Kenyan shillings ($1.87 billion) worth of transactions during 2021-2022 alone. The figure is expected to rise considerably for 2024 as the number of users keeps increasing dramatically. Nigeria on the other hand recorded a massive $56 billion worth of transactions during 2022-2023 alone, with many individuals seeking to buy and sell Bitcoin and other cryptocurrencies. So, there is plenty of taxable income in the economy that tax authorities can exploit to their advantage. 

African crypto users are growing exponentially because of the long-standing problems associated with local fiat currencies. Double-digit inflation is almost a guarantee in the continent with many stressed economies facing hyperinflation that is decimating earnings and affecting businesses considerably. Cryptocurrencies offer a hedge against this onslaught of inflation that has picked up pace after the Covid-19 pandemic. They offer cheap, borderless, immutable transactions that don’t require a lot of infrastructure and that is why the average African user is flocking to it. Africa has the best use-case scenario for implementing digital currencies at a state level but the situation isn’t politically viable for it at the moment, and many users are increasingly interested in converting Bitcoin to Naira as they explore these digital options. 

The Future

While authorities in Kenya are picking up the pace and creating a relatively conducive environment, there is a lot of catching up to do for Nigeria. The country has started giving legal cover to local cryptocurrency exchanges amid an ongoing feud with Binance and other multinational platforms. 

The government is aiming to boost indigenous digital asset companies through this move but it could risk backlash from the big players who wield considerable influence and power. 

In this evolving landscape, platforms like Remitano play a crucial role by facilitating peer-to-peer cryptocurrency trading, providing users with accessible options for engaging in the crypto market. As regulatory frameworks develop, Remitano and similar platforms may significantly influence how crypto transactions are conducted and taxed in Africa.