The Level of Deepening and Classification of Cryptocurrency Transactions and Taxation in Kenya
This study will seek to determine the level of deepening and classification of cryptocurrency transactions and taxation in Kenya. Cryptocurrencies present a non-tax revenue base for the revenue authority; however, no existing tax laws are guiding the treatment of cryptocurrencies. The main objective of this study will be to find out the effect of classifications of cryptocurrency transactions on the tax laws and regulation in Kenya. The study will employ a qualitative exploratory research design and will use primary data collected from tax consultants within the Kenya Revenue Authority and the big audit firms in Kenya by conducting interviews. The data collected from the interviews has been analyzed by the content analysis method. The study has established that there is a knowledge gap amongst the professionals on the use, accounting, and taxation of cryptocurrency. It is also evident that cryptocurrencies can be classified as intangible assets, inventory, or digital currency rather than money or cash. The circumstances and nature of the transactions affect the taxation of the income generated from cryptocurrency transactions. The study has also established there is need for regulation of cryptocurrencies in the aspects of accounting guidelines, taxation framework and legality of the activities associated with cryptocurrency.