Kenya’s Finance Bill 2026 Could Close Crypto and Offshore Gambling Loopholes

Kenya’s Finance Bill 2026 could mark one of the biggest tax and compliance shifts for the country’s crypto and betting sectors.

The Bill, submitted to Parliament by Treasury Cabinet Secretary John Mbadi, proposes new reporting rules for virtual asset service providers, commonly known as VASPs. These include crypto exchanges, trading platforms and other digital asset intermediaries that serve Kenyan users.

At the same time, the Bill proposes to bring back a 20% withholding tax on gambling winnings.

Taken together, these two measures could close what some players have used as an escape route: moving money through crypto or offshore betting platforms to avoid local tax visibility.

This is not just a crypto story. It is also a gambling, taxation and financial surveillance story.

What Is Kenya Proposing in the Finance Bill 2026?

The Finance Bill 2026 proposes that virtual asset service providers should file annual information returns with the Kenya Revenue Authority.

According to TechCabal, the proposal would require crypto exchanges and digital asset platforms to disclose details such as the names of Kenyan users, transaction histories and wallet activities. The Bill proposes amendments to the Tax Procedures Act through new sections that bring virtual asset activity into Kenya’s formal tax reporting system.

In simple terms, KRA wants more visibility into who is using crypto, which platforms they are using, and what transactions are taking place.

The Bill also allows Kenya to enter into agreements with other countries for the automatic exchange of information related to virtual asset transactions. This means crypto-related tax information could eventually be shared across borders between Kenya and partner jurisdictions.

That is important because many Kenyan crypto users do not only use local platforms. Some use offshore exchanges, peer-to-peer markets, foreign wallets and cross-border digital asset services.

The Gambling Tax Angle

The second major part of this story is gambling.

The Finance Bill 2026 proposes to reintroduce a 20% withholding tax on winnings earned by both residents and non-residents. Legal analysis by Cliffe Dekker Hofmeyr says this would reverse the position introduced by the Finance Act 2025, which had removed taxation of winnings.

The same analysis says the proposed framework would sit alongside the existing 5% withholding tax on withdrawals from betting or gaming wallets. That means betting users could face tax at different points depending on how the final law is passed and implemented.

The Bill also proposes to broaden gambling-related definitions. For example, it introduces a wider definition of “amount deposited” for betting and gambling excise duty purposes. This would include money or value paid, transferred, credited or made available for betting or gambling, including chips, tokens, credits and similar instruments.

This matters because modern betting does not always look like old-style cash gambling. It can involve digital wallets, credits, tokens, mobile deposits and platform balances.

Why People Are Calling It a Crypto-Offshore Gambling Crackdown

The phrase “crypto-offshore gambling escape valve” refers to a common route some users may take when local gambling or tax rules become stricter.

A betting user may try to move funds through crypto. A platform may operate offshore. A player may use digital assets to deposit or withdraw value outside traditional banking channels.

The Finance Bill 2026 appears to target both sides of that route.

On one side, crypto platforms would face annual reporting obligations to KRA. On the other side, gambling winnings would again face a 20% withholding tax if the proposal becomes law.

Bitcoin.com described the Bill as closing “both lanes” of the crypto-offshore migration path by combining mandatory annual VASP reporting with the reintroduction of the 20% tax on gambling winnings.

For ordinary users, the message is simple: crypto may no longer provide the same level of tax invisibility it once appeared to offer.

What Is a VASP?

A VASP is a Virtual Asset Service Provider.

This can include businesses that help users buy, sell, exchange, transfer or store virtual assets.

Examples may include:

• crypto exchanges
• crypto brokers
• trading platforms
• custodial wallet providers
• intermediaries handling virtual asset transactions

Under the proposed framework, these service providers may be required to report information about users and transactions to KRA.

This does not mean every crypto user is automatically doing something wrong. It means the government wants crypto platforms to behave more like traditional financial institutions when it comes to tax reporting.

Why Is Kenya Doing This Now?

Kenya has one of the most active crypto markets in Africa. Many Kenyans use digital assets for trading, savings, remittances, peer-to-peer payments and online business.

That growth has attracted attention from regulators.

The government wants to reduce tax leakage, improve financial transparency and bring digital asset activity into the formal economy. The proposed rules also reflect a wider global trend where governments are pushing crypto platforms to collect and share more information about users and transactions.

TechCabal notes that the proposed rules are aligned with a global push to subject crypto platforms to similar disclosure standards as banks and other financial institutions.

This means Kenya is not acting in isolation. Around the world, tax authorities are moving toward more crypto reporting and automatic exchange of digital asset information.

What This Means for Kenyan Crypto Users

If the Finance Bill 2026 passes in its current form, Kenyan crypto users should expect less privacy when using regulated or reportable platforms.

Crypto transactions may become easier for KRA to trace, especially when linked to exchanges, user accounts, wallet activity or identity verification records.

This could affect users who:

• trade crypto on centralized exchanges
• use offshore crypto platforms
• move funds between wallets and betting sites
• earn income from digital assets
• use crypto to receive or send cross-border value
• fail to declare taxable crypto-related income

The biggest change is not necessarily a new crypto tax rate. The bigger change is reporting.

Once platforms are required to report user activity, tax enforcement becomes easier.

What This Means for Betting and Gambling Users

For betting users, the key proposal is the return of the 20% withholding tax on winnings.

This means a person who wins from betting, gaming or related gambling activities may have tax deducted before receiving the final payout, depending on the final wording of the law and implementation rules.

For users who rely on betting wallets, platform credits or digital balances, the broader definition of deposits could also matter. It suggests the government wants to capture different forms of value used in gambling, not just direct cash deposits.

This could make offshore or crypto-linked betting less attractive if platforms and payment routes become more visible to tax authorities.

What This Means for Crypto Exchanges and Platforms

Crypto exchanges serving Kenyan users may face heavier compliance obligations.

They may need to collect better customer information, keep more detailed transaction records and submit annual reports to KRA.

This could increase compliance costs for exchanges, wallet companies and other VASPs.

Smaller platforms may find the rules expensive to follow. Larger exchanges may be better prepared because many already comply with Know Your Customer and anti-money laundering requirements in other markets.

However, if Kenya’s rules become too strict or unclear, some platforms may choose to limit services to Kenyan users instead of taking on the extra reporting burden.

Could This Push Users Further Offshore?

It could, but the Bill seems designed to reduce that option.

If Kenya can exchange virtual asset information with other countries, offshore crypto activity may become easier to track over time.

That does not mean every offshore wallet will be visible immediately. Decentralized wallets, peer-to-peer transactions and non-custodial activity are harder to monitor than centralized exchange accounts.

But the direction is clear. Kenya wants to reduce the gap between local tax rules and offshore digital finance activity.

Is This Already Law?

No.

This is still a Finance Bill, not a final Act.

The proposal must go through Parliament, public participation, committee review, debate and possible amendments before it becomes law.

That means the final version may change.

Crypto users, betting firms, exchanges, tax professionals and digital rights advocates should follow the process closely because the final wording will determine how the rules are applied.

Why This Story Matters

Kenya’s Finance Bill 2026 shows that the government is moving beyond general crypto warnings.

It is now trying to build a reporting system around digital assets.

This is a major shift.

In the past, many crypto users treated digital assets as separate from the formal financial system. But once exchanges are required to report user identities and wallet activity, crypto becomes much more visible to tax authorities.

At the same time, the return of gambling winnings tax shows that Kenya is also targeting the betting economy.

The combination of crypto reporting and gambling tax could make it harder for users to move money between betting platforms, offshore accounts and digital assets without being noticed.

Key Takeaways

Kenya’s Finance Bill 2026 proposes annual reporting requirements for virtual asset service providers.

Crypto platforms may be required to report Kenyan users, transaction histories and wallet activity to KRA.

The Bill also proposes to reintroduce a 20% withholding tax on gambling winnings for both residents and non-residents.

The changes could make it harder for users to avoid tax visibility by using crypto or offshore gambling platforms.

However, the Bill is not yet final law and may change during the parliamentary process.

FAQ

What is Kenya’s Finance Bill 2026 proposing for crypto?

It proposes annual information reporting by virtual asset service providers. This could require crypto platforms to report user and transaction information to KRA.

Will crypto exchanges report Kenyan users to KRA?

If the proposal becomes law, VASPs serving Kenyan users may be required to file annual information returns with KRA.

Is Kenya introducing a new crypto tax?

The key proposal discussed here is not a new direct crypto tax rate. It is a reporting requirement that could help KRA identify taxable crypto activity.

What is the proposed gambling tax?

The Bill proposes to reintroduce a 20% withholding tax on gambling winnings for both residents and non-residents.

Is the Finance Bill 2026 already law?

No. It is still a Bill before Parliament. It can still be debated, amended or changed before becoming law.

Why does this matter for offshore betting?

Because the Bill targets both crypto reporting and gambling winnings. This could make it harder for people to use crypto or offshore platforms to avoid local tax visibility.