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Kenyan legislation establishes crypto taxation, creates consumer protections

Written by  The Dubrovnik Times Jan 22, 2023

Local news sources said that on November 21, a change was proposed to the Capital Markets Law of Kenya. If this change is made, people who own or trade cryptocurrency must tell the Capital Markets Authority what they are doing. This is the first time that Kenya's financial rules include cryptocurrencies. Thousands of people use the to buy and trade cryptocurrencies.

Any cryptocurrency held for less than a year would be taxed as income, while any cryptocurrency held for more than a year would be taxed as a capital gain. Kenyans pay between 10% and 30% of their income in taxes. At the moment, all commissions and fees that come with trading cryptocurrencies are taxed by 20%.

People could sign up to be crypto traders, and all digital currency transactions in the country would be kept in a central electronic record. Also, cryptocurrencies are securities. Kenya came in fifth place in peer-to-peer trade. At the same time, this idea is being thought about, Kenyan President William Ruto has asked the public for a 100% increase in the country's income. About 4 million people in this country use cryptocurrencies.

This means that about 8.5% of people in Kenya own their own homes, which is the fifth-highest rate in the world. Together with a Swiss non-profit called Near Foundation, the Kenyan blockchain community Sankore is setting up a regional hub. The hub's main goals are to help people in the area get better at what they do and to build projects that will help the local ecosystem.

Kilimo Shwari is a type of insurance that helps farmers deal with the effects of natural disasters. It uses a technology called "blockchain," and Sankore is happy to help pay for projects like this one. Aside from this, the company also allows Ledja, a project that wants to reduce the number of fake documents in Africa by using Near Protocol to check documents.

These projects will move forward because the partnership can help develop talent in the area through workshops. Kevin Imani, the founder of Sankore, said they were "thrilled" to be working with Near to "educate and nurture creative people" and help them become blockchain engineers. Because Sankore and Near were in the same group, this was said.

Sankore also hosts events for young Kenyans called "meetups" where they can learn about Web3. Together, this and the friendship with Near will help. The education part of the hub is already working with local colleges, and 84 students and 6 recent graduates have been trained as developers through Near workshops. This number will likely go up as word gets out about the center.

More people in other parts of Africa are using blockchain technology and cryptocurrencies. In April, the Central African Republic made Bitcoin legal to pay (CAR). This means that anyone in the CAR can now use bitcoin.

The law says that people should follow the rules. Most of the time, it takes more than one group to ensure these laws are followed. It significantly affects many parts of society, like the economy and politics. There are different kinds of law, like contract law, property law, trust law, criminal law, constitutional law, and administrative law.

Constitutional law says how human rights should be protected, leaders should be chosen, and new laws should be made. When people study law, they also worry about fairness, equity, and justice.

Did you think about it?

When South Africa made the rules of apartheid into law in 1948, racism became legal. The Prohibition of Mixed Marriages Act, also known as Act No. 55 of 1949, was a piece of discriminatory legislation passed in South Africa during apartheid. Because of this law, people of different races couldn't get married. This law had been in place for 36 years before it was finally changed in 1985.

How laws are made

The Ministry or department in charge of the problem can write a Green Paper, which is a type of discussion paper. This is the first step in making new laws sometimes. This discussion paper gives an overview of the main ideas that led to a specific policy. After that, people can talk about it, comment on it, or say what they think.

Because of this, the government makes a White Paper, a broad summary of its policies. It is a better-written discussion paper. It is made by the correct department or task team, and after reading the text, the right committees in parliament can suggest changes or other ideas. After that, it goes back to the Ministry for more talk, feedback, and a final decision.


The Voice of Dubrovnik


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