- Appeals court ruling scrapped 2023 finance bill
- 2023 finance bill imposed a 3% Digital Asset Tax
- Digital Asset Tax was implemented in September 2023
Recently, a Kenyan appeals court nullified the country’s 2023 Finance Bill, describing it as unconstitutional. This decision crippled the plans of the William Ruto-led government.
Finance bills are the primary means the government outlines its plans to increase revenue, such as tax increases and the imposition of new levies.
In the 2023 bill, Ruto's government imposed a housing tax, doubled the value-added tax on gasoline, raised the top personal income tax rate, and took other measures. These measures triggered Kenyans to take to the streets in protest. As the streets boiled, the bill’s legitimacy was tested in court.
“A further declaration is hereby issued that the failure to comply with this constitutional dictate renders the entire Finance Act, 2023 unconstitutional,” a three-judge bench of the Court of Appeal said, via Reuters, in a ruling.
Last year, a lower court ruled in favour of the government, removing only minor aspects of the bill.
How the Kenyan Appeals Court judgment on Finance Bill 2023 favours crypto exchanges
The 2023 finance bill imposed a 3% Digital Asset Tax (DAT) on crypto exchanges. The bill stipulated that a 3% tax on revenue from trading crypto and other digital assets be paid by crypto exchanges like Binance and Coinbase. DAT was implemented in September 2023. Now, the appeals court ruling, which nullified the bill, has essentially scrapped the tax, thereby saving crypto exchanges lots of money.
In addition, the law mandated that crypto taxes be sent in five working days, along with a tax return that included the necessary information and any deductions.
Despite the bill being in force since September last year, a crypto executive quoted by TechCabal said that before the appeals court ruling, not even one of the local cryptocurrency exchange platforms had sent the taxes to the Kenya Revenue Authority (KRA).
Kenya's digital asset market, which is second only to Nigeria in terms of crypto-related activity, is one of the biggest in Africa. The government intended to milk it with DAT to shore up revenue.
An executive at the Blockchain Association of Kenya (BAK) stated that a tax based on transaction gains or income, accounting for potential costs and losses, could have been more appropriate given the volatile nature of cryptocurrencies.
BAK filed a lawsuit in September 2023 to prevent the new cryptocurrency taxes. But Kakai claims that the case is now void.
US presidential election: Harris picks crypto-neutral Tim Walz as running mate
Meanwhile, TheRadar earlier reported that The vice president of the United States and Democrats presidential candidate for the 2024 US presidential election, Kamala Harris, has unveiled her running mate. According to multiple reports, Harris chose Minnesota Governor Tim Walz.
Walz is in his second term as governor of Minnesota after spending more than a decade in Congress.
Shortly after the news broke, Walz took to X to announce that he was “all in”.
