NAIROBI, Kenya – In a move aimed at accelerating the growth of the digital economy, the government has proposed halving the tax on digital asset transfers from 3% to 1.5% in the Finance Bill, 2025.
Speaking during the Kenya-European Union Business Forum on Monday, President William Ruto said the tax reform is part of a broader agenda to foster innovation, attract foreign investment, and position Kenya as a leading technology hub on the continent.
“To support this growth, we have introduced tax reforms that foster a pro-business environment,” Ruto said. “This signals our commitment to an innovation-driven economy that nurtures start-ups, MSMEs, and investors alike.”
The revised tax rate is expected to offer relief to emerging players in Kenya’s digital space, which includes cryptocurrency traders, fintech startups, and blockchain innovators who have previously raised concerns over the high cost of compliance.
Global Tech Firms Bet on Kenya
Ruto highlighted growing investor confidence in Kenya’s tech ecosystem, citing the establishment of regional operations by global tech giants such as Microsoft, Amazon Web Services, and Apple.
Business Process Outsourcing (BPO) firms, including Sama, CCI, and Teleperformance, have also expanded their footprint in the country.
“These efforts are already bearing fruit,” the President said, noting that Kenya was recently ranked the sixth-largest economy in Africa by the International Monetary Fund, with GDP projected to reach $132 billion in 2025.
He also pointed to the 21% appreciation of the Kenyan shilling in 2024 as evidence of renewed macroeconomic stability.
Building a Digital Infrastructure Backbone
To sustain this momentum, the government is rolling out an ambitious last-mile fibre connectivity plan, which aims to lay 100,000 kilometres of fibre optic cable and establish 25,000 public Wi-Fi hotspots by 2027.
“We are implementing bold and transformative measures to build a robust digital economy,” Ruto said.
The government is also investing in digital skills development through 284 digital hubs in Technical and Vocational Education and Training (TVET) institutions, with 400 more currently under construction.
These hubs are intended to serve as incubators for innovation and digital entrepreneurship.
Digitising Governance
Ruto touted the success of the expanded e-Citizen platform, which has now digitised over 20,000 public services, improving access for both businesses and citizens.
“This has made it easier, faster, and more affordable for people to interact with government agencies,” he said.
Strengthening Ties with the EU
The President also underscored Kenya’s commitment to deepening trade and investment ties with the European Union, following the ratification of the EU-Kenya Economic Partnership Agreement (EPA).
“Significant strides have been made in operationalising this historic agreement,” Ruto said, referencing the first EPA Council meeting held on the sidelines of the business forum.
He called on the newly launched European Union Chamber (EuroCham) and its planned collaboration with the Kenya National Chamber of Commerce and Industry to work together under a unified Kenya-EU Business Council.
“Our partnership with the European Union has been instrumental in driving development cooperation across critical sectors,” Ruto added, pointing to EU-funded initiatives in energy, infrastructure, water, and agriculture.
Kenya is expected to press for more investment and trade commitments during the upcoming African Union-European Union Ministerial Meeting in Brussels later this month.