UN calls on Kenya to tax crypto sector players and ban advertising

The United Nations has asked Kenya and other developing countries to regulate and tax the cryptocurrency industry to limit the risk of meltdown in the crypto market and risks of financial instability.

A policy brief from the United Nations Conference on Trade and Development (UNCTAD) calls for Kenya to enforce mandatory registration for crypto exchanges and digital wallets and tax transactions to make the sector less attractive.

The Crypto sector has gotten a slice of the tax haven pie as the sector is largely unregulated despite its growing popularity.

The UN Trade Agency now wants Kenya to impose entry fees on crypto exchanges and digital wallets, and impose transaction taxes similar to excise taxes levied on bank transactions. Banks deduct 20 percent excise tax on all commissions and fees charged on transactions.

“Require mandatory registration of crypto exchanges and digital wallets and make the use of cryptocurrencies less attractive, for example by imposing entry fees for crypto exchanges and digital wallets and/or levying financial transaction taxes on cryptocurrency trading,” the report reads .

Crypto exchanges are platforms operated by companies where investors buy and sell digital tokens such as Bitcoin, Etherum, and Tether, among others.

“Regardless of the reason for using cryptocurrencies, crypto exchanges play a crucial role in enabling their wider use. Such exchanges act as clearinghouses, facilitating conversions between cryptocurrencies and sovereign currencies,” says UNCTAD.

The agency also wants banks and other financial institutions to be prevented from holding stablecoins and cryptocurrencies or offering related products to customers.

The UN Trade Organization has also called on the government to limit or ban the advertising of crypto exchanges and digital wallets in public spaces and social media in a bid to curb the spread of cryptos.

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