Legal Challenge to Ruto’s September Tax
The Blockchain Association of Kenya (BAK) has filed a petition challenging the legality of the newly implemented Digital Asset Tax, which went into effect on 1 September.
In its petition to the High Court, BAK seeks to prevent the implementation of the tax stipulated in the Finance Act of 2023.
“The Block Chain Association of Kenya (BAK) has officially filed a petition challenging the legality and constitutionality of the Digital Asset Tax (DAT) with the High Court of Kenya,” read the BAK notice seen by PoliticalPulseChat.
BAK is also requesting clarification on the constitutional implications surrounding the imposition of the tax, which will charge Kenyans 3% of the proceeds from the sale of digital assets.
BAK contends further that the introduction of the Digital Assets Tax would cripple the country’s cryptocurrency industry, describing the new tax as “harsh” and potentially detrimental to the development of the digital industry.
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The enforcement of this stringent DAT could have negative effects on industry growth and innovation.
“We are deeply committed to advocating and lobbying for an environment conducive to innovation while ensuring legal clarity,” BAK explained.
The hearing is scheduled for Thursday, September 28, 2023.
The Finance Act of 2023 established DAT as a tax on the aggregate earnings from digital asset transfer transactions.
A digital asset is a product that has been created and stored digitally, is identifiable, discoverable, and has monetary value. These include crypto and digital tokens that can be traded electronically.
According to the Finance Act 2023, cryptocurrencies, Non-Fungible Tokens (NFTs), e-tickets, and potentially any digital asset with monetary value are taxable.
Every month, merchants are required to submit the amount charged to the Kenya Revenue Authority (KRA) within five business days.
Legal Challenge to Ruto’s September Tax