Taxation of Digital Assets in Kenya: Is it a Case of One Step Forward and Two Steps Backwards?

Publication Information

Journal Title: International Tax Law Review
Author(s): Rodney Oluoch
Published On: 11/09/2023
Volume: 2
Issue: 3
First Page: 46
Last Page: 69
ISSN: 2583 6838
Publisher: The Law Brigade Publisher

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Rodney Oluoch, Taxation of Digital Assets in Kenya: Is it a Case of One Step Forward and Two Steps Backwards?, Volume 2, International Tax Law Review, 46-69, Published on 11/09/2023, Available at


The assimilation of state economies and markets into the digital world has increased in recent years. This has put a discernible strain on the applicable national and international tax rules, which relied on the physical presence test to determine tax liability.[i] Today’s virtual, anonymous and borderless nature of the digital world has made it difficult for tax authorities to identify the residency or location of a buyer or a seller for tax purposes in a commercial transaction.[ii] The result of this is that many governments, including the Kenyan government, are exposed to the risk of base erosion and profit shifting (BEPS) arising from internet-based transactions.[iii]Due to the foregoing, Kenya opted to come up with workable tax law through which the country’s tax base can be protected from the threats posed by digitalisation.

[i] OECD “Addressing the Tax Challenges of the Digital Economy(2015) OECD Publishing, Paris. Available at [accessed on the 8th March 2020].

[ii] Peter M. M. “Taxation of Electronic Commerce- A Commentary” 2019 Journal for Financing for Development Vol. 1 Issue 1.

[iii]Basu S “International Taxation of e-commerce: Persistent Problems and Possible Development” 2008 Journal of Information Law and Technology Vol. 1.

Keywords: Digital Assets, Internet of Things, Crypto Currency, Digitalised Economy, Digital Assets

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