Treasury Cabinet Secretary John Mbadi submitted Kenya’s Finance Bill 2026 to Parliament on Wednesday, a piece of legislation that directly targets the country’s crypto sector. The bill introduces mandatory annual reporting requirements for virtual asset service providers — exchanges, wallet operators, and other intermediaries — and shuts down two avenues firms have used to move operations offshore.
What the bill does to crypto firms
Under the proposed law, all virtual asset service providers registered in Kenya must submit annual reports detailing customer transactions, wallet addresses, and any transfers above a threshold yet to be specified. The reporting obligation applies to both Kenyan-incorporated entities and foreign firms that provide services to Kenyan residents. Operators who fail to comply face penalties including license suspension and fines.
The bill also closes what Mbadi’s office called “both lanes of the crypto-offshore migration path.” One lane involved registering in a low-tax jurisdiction while maintaining a physical presence in Kenya; the other involved routing customer funds through foreign subsidiaries. Both structures will now be treated as taxable Kenyan operations if they derive revenue from Kenyan users.
Gambling withholding tax returns
Separately, the Finance Bill 2026 reintroduces a 20% withholding tax on gambling winnings — a provision that was removed from the 2025 tax code after industry pushback. The tax applies to winnings from casinos, sports betting, and online gaming platforms. The Treasury estimates the measure will bring in roughly 4.2 billion shillings in the first year.
The gambling tax has been a recurring political flashpoint in Kenya. Lawmakers from opposition parties have already indicated they will challenge the provision during committee readings, arguing it burdens lower-income bettors. The crypto-reporting requirements, by contrast, have drawn less public debate — in part because the industry remains small relative to gambling.
Timing and what happens next
The bill now heads to the National Assembly’s Finance Committee, which will hold public hearings over the next two weeks. Industry groups have until May 27 to submit written comments. A final vote is expected before the end of June, with the law taking effect July 1 if passed.
For crypto firms operating in Kenya, the next few weeks are a countdown. The reporting rules would force many to overhaul compliance systems. And the offshore closure means there’s no easy exit — at least not one that keeps them legal.
