The 3% Digital Asset Tax is gone. The Finance Act 2025 repealed it, and since 1 July 2025 the live tax on virtual assets in Kenya is a 10% excise duty on the fees a virtual asset service provider charges, not on the value of your transaction. So if you are still reading that crypto in Kenya is taxed at 3% of the gross transfer amount, you are reading repealed law. The new tax is narrower in two ways: it falls on the platform fee rather than the trade value, and it is collected by the platform, not by you the trader. A KES 1,000,000 trade that earns the exchange a KES 5,000 fee now carries KES 500 of excise on that fee, not KES 30,000 of tax on the trade. There is no bespoke statutory crypto capital-gains tax in the current law, so any income or gains question turns on the facts of what you are doing. And a separate reporting regime, modelled on the OECD framework, is proposed in the Finance Bill 2026 but is not yet law.

Short answer

Is there still a 3% crypto tax in Kenya?

No. The 3% Digital Asset Tax was repealed. The Finance Act 2023 had inserted it as section 12F of the Income Tax Act, charging 3% on the gross fair market value of every transfer or exchange of a digital asset. The consolidated Income Tax Act (Cap. 470), as in force on 1 January 2026, now records section 12F as repealed by Act No. 9 of 2025, section 8.

The Digital Asset Tax had a brief, contested life. It came into force in 2023, charging 3% on the gross fair market value of every transfer. The Finance Act 2023 that introduced it was challenged on constitutional grounds in litigation that reached the Supreme Court, which in [2024] KESC 63 (KLR) (29 October 2024) allowed the appeal in part and left the Act standing. That was a ruling on the constitutionality of the whole Finance Act 2023, not a merits decision on the Digital Asset Tax itself, so the tax was never struck down by a court. Parliament scrapped it anyway: the Finance Act 2025 repealed it with effect from 1 July 2025. Over its roughly 21 months of operation, the tax raised in the region of KES 1.1 billion before it was retired.

So the sequence is: introduced in 2023, the Finance Act that carried it survived constitutional challenge in 2024, and the tax was repealed in 2025. Anyone quoting a 3% gross-value crypto tax in 2026 is citing law that no longer exists.

What is the crypto tax in Kenya now?

A 10% excise duty on VASP fees. The First Schedule, Part II of the Excise Duty Act (Cap. 472), as inserted by the Finance Act 2025 (Act No. 9 of 2025), section 46, provides that excise duty on the fees charged on virtual asset transactions by virtual asset providers is 10% of the excisable value.

Read that carefully, because the base changed entirely. The old tax was 3% of the transaction value. The new tax is 10% of the fee the platform charges to run that transaction. That is a much smaller base. If you move KES 1,000,000 of crypto and the exchange takes a 0.5% fee, the fee is KES 5,000 and the excise is KES 500. Under the old regime, the same trade would have attracted 3% of KES 1,000,000, which is KES 30,000. The headline rate went up from 3% to 10%, but the thing it is charged on shrank from the whole trade to the platform’s cut, so the actual shilling cost on most transactions fell sharply.

This is a fee tax, not a transaction tax. It is closer to the excise already charged on other financial-service fees in Kenya than to a tax on the crypto itself.

Who pays and who collects the 10% excise?

The virtual asset provider collects and remits it. Excise duty in Kenya is a tax on the supplier of the excisable service. The Excise Duty Act provision charges the duty on the fees charged by virtual asset providers, so the legal incidence sits on the platform that earns the fee. In practice the platform either absorbs the excise out of its margin or passes it through to the customer as a line on the fee, but the obligation to account for it to the Kenya Revenue Authority is the platform’s, not the individual trader’s.

For a Kenyan trader, this is a real simplification compared with the old Digital Asset Tax, where you could be the person on the hook to account for a 3% charge on every disposal. Under the excise regime, the compliance burden lands on the licensed (or to-be-licensed) provider, which must identify the fee component of every transaction, apply 10%, and remit it on the Excise Duty Act cycle.

A note for founders: the registration mechanics with KRA and the exact filing cadence under the Tax Procedures Act are a separate workstream from the rate itself. Treat the rate as confirmed at 10% of fees, and confirm the precise remittance mechanics against the Tax Procedures Act before you publish numbers to your own users.

Are crypto capital gains taxed in Kenya?

There is no bespoke statutory crypto capital-gains regime in the current consolidated law. Section 3(2) of the Income Tax Act lists the classes of income that are chargeable to tax, and after the repeal of section 12F none of those classes expressly names virtual or digital assets.

That does not mean crypto gains are tax-free. It means the answer depends on the facts. The key distinction is trading versus investment:

This is exactly the kind of question where a one-size answer is wrong. A high-frequency trader, a treasury holding crypto on a company balance sheet, and an individual who bought once and sold years later are in three different positions. The current law does not give a single bright-line rule, so the analysis is transaction by transaction.

If you are structuring a business or a treasury position around this uncertainty, that is a conversation worth having before you transact, not after. See Fintech lawyer Kenya for transaction-level structuring.

What is the Finance Bill 2026 CARF reporting proposal?

Proposed, not enacted. The Finance Bill 2026 contains provisions (proposed as sections 6C and 6D) that would require VASPs to file annual returns with the Kenya Revenue Authority on their reportable users and the controlling persons behind them. The design aligns Kenya to the OECD Crypto-Asset Reporting Framework (CARF), the international standard for automatic exchange of crypto account information between tax authorities.

Two points to hold on to. First, this is a reporting duty, not a new tax. It would not add a charge on your crypto; it would require platforms to tell KRA who their Kenyan users are and what they hold or move, the same way banks already report under the Common Reporting Standard. Second, it is not law yet. The Finance Bill 2026 has not been enacted, and the timelines reportedly place Kenya in a second-tier adoption group, with exchange of information beginning around 2028 or 2029. So this is a planning signal for the next two to three years, not a present obligation.

The practical takeaway: if you run a VASP, build your customer due diligence and record-keeping so that producing a CARF-style report later is a data-export exercise, not a panic. The anti-money-laundering rules already require most of that data. For how the AML and reporting overlay works, see the broader framework in VASP licensing in Kenya.

How does crypto tax fit with the rest of the VASP regime?

Tax is one layer of a stack. The Virtual Asset Service Providers Act, 2025 commenced on 4 November 2025 and sets up licensing, anti-money-laundering duties, and conduct rules for every crypto business in or from Kenya. The 10% excise sits on top of that as the tax layer. The two move on separate tracks: the excise has been live since 1 July 2025, while the VASP licensing channel is not yet open because the implementing regulations have not been gazetted.

That gap creates a strange but real position for 2026. A Kenyan crypto business can owe the excise and carry full anti-money-laundering reporting duties before it can even apply for the licence it will eventually need. Tax and AML obligations do not wait for the licensing regulations. For the full licensing picture, the dual CBK and CMA regulator model, and the compliance deadline of 4 November 2026, read the pillar on VASP licensing in Kenya.

If you are weighing whether to base a crypto business in Kenya at all given this regulatory timing, crypto business offshore vs Kenya covers that decision, and register crypto company Kenya covers the corporate setup.

Common errors to correct

These are the mistakes we see most often in 2026 commentary and in client questions:

Frequently asked questions

Is crypto still taxed at 3% in Kenya in 2026? No. The 3% Digital Asset Tax in section 12F of the Income Tax Act was repealed by the Finance Act 2025 (Act No. 9 of 2025, section 8). The consolidated Income Tax Act now records section 12F as repealed. The live tax is a 10% excise on VASP fees.

When did the 3% Digital Asset Tax end? The repeal took effect from 1 July 2025. The tax had run from 1 September 2023, so it was in force for roughly 21 months, during which it raised around KES 1.1 billion.

Did a court not uphold the Digital Asset Tax? Not directly. There was no court ruling on the Digital Asset Tax on its own merits. What happened is that the Finance Act 2023, which introduced the tax, survived a broad constitutional challenge in the Supreme Court in [2024] KESC 63 (KLR) (29 October 2024), where the appeal was allowed in part and the Act was left standing. That kept the tax alive but did not rule on it specifically. The tax ended because Parliament repealed it in the Finance Act 2025, not because of any court decision.

What exactly is the 10% excise charged on? The fees a virtual asset provider charges on a transaction, not the transaction value. The Excise Duty Act (Cap. 472), First Schedule, Part II, as inserted by the Finance Act 2025, section 46, sets the rate at 10% of the excisable value, and the excisable value here is the platform fee.

Do I pay the 10% excise as a trader, or does the exchange? The exchange or other virtual asset provider accounts for and remits the excise to KRA. It may pass the cost through to you as part of its fee, but the legal obligation to remit sits with the provider.

Are my profits from selling crypto taxable in Kenya? Possibly, depending on the facts. There is no bespoke statutory crypto capital-gains regime, but gains can be chargeable as income under general principles if you are trading. Long-term investment disposals are more fact-sensitive. Get advice on your specific profile rather than assuming either way.

What is CARF and does it apply to me now? CARF is the OECD Crypto-Asset Reporting Framework, a standard for tax authorities to automatically exchange crypto account information. Kenya has proposed aligning to it in the Finance Bill 2026 (proposed sections 6C and 6D), which would make VASPs file annual user-level returns with KRA. It is not yet enacted, and Kenya is reportedly in a later adoption tier, with exchange around 2028 to 2029.

I run an exchange. What do I need to do about the excise now? Identify the fee component of each transaction, apply 10% excise, and remit it to KRA on the Excise Duty Act cycle. Confirm the registration and filing mechanics under the Tax Procedures Act for your specific model before you set customer-facing pricing.

Does the excise apply if I am not yet licensed as a VASP? The excise is a tax obligation that does not depend on the licensing regulations being gazetted. If you charge fees on virtual asset transactions in or from Kenya, the excise framework applies. The licensing channel and the tax obligation move on separate tracks.

If you are running an exchange, a wallet, a payment gateway or a treasury that holds crypto, the tax position is not the 3% number most online guides still quote. It is a 10% excise on fees, an open income-tax question on gains, and a CARF reporting duty coming down the line. We help founders and treasury teams get the tax structure right alongside the licensing and AML build-out. Book a consultation and we will scope your position against the law as it actually stands in 2026.

Related reading: VASP licensing in Kenya, Fintech lawyer Kenya, register crypto company Kenya, and crypto business offshore vs Kenya.