The Kenyan banking industry contributed KES 194.81 billion to the National Treasury in 2024, accounting for 8.09 per cent of all government tax receipts, according to the Total Tax Contribution of the Kenya Banking Sector, 2024 Report released by the Kenya Bankers Association (KBA) in collaboration with PwC Kenya.
The report, which covers 36 banks and microfinance institutions, underscores the sector’s vital role in national revenue mobilization and its high compliance levels.
According to the report, the KES 194.81 billion, comprised KES 100.12 billion in taxes borne, including Corporate Tax, and KES 94.69 billion in taxes collected on behalf of the government, such as Pay As You Earn (PAYE) and Withholding Tax.
Corporate Tax remained the largest component at KES 69.41 billion, representing 35.63 per cent of total taxes, although it recorded a 4.98 per cent decline from 2023. This drop was partly offset by a sharp increase in people-related taxes, driven by the full-year implementation of the Affordable Housing Levy (AHL), which surged 113 per cent to KES 3.45 billion.
The report further shows that for every KES 100 of profit, banks paid KES 38.50 in taxes, down from KES 46.77 in 2023, mainly due to improved profitability within the sector.
KBA Chief Executive Officer Raimond Molenje noted that the findings reflect the banking sector’s strong contribution to fiscal stability.
“The KES 194.81 billion tax contribution by 36 participating banks in 2024 highlights the sector’s central role in Kenya’s revenue mobilization. This data provides valuable insights for policymakers as they consider how to balance fiscal sustainability with sector resilience,” he said.
PwC Country and Regional Senior Partner for Eastern Africa, Peter Ngahu, emphasized the importance of the sector in Kenya’s tax ecosystem.
“This 8.09 per cent contribution from just 36 taxpayers underscores the banking sector’s important role in Kenya’s tax revenues and highlights the continued reliance on a few highly compliant taxpayers,” he stated.
The report also analyzed how banks distribute value among key stakeholders. The government received the largest share at 54.95 per cent through taxes, followed by employees at 25.62 per cent through salaries and benefits, and shareholders at 19.44 oer cent via dividends.
Despite their strong compliance, banks continue to face high administrative costs, with each institution spending an average of KES 13.5 million annually on tax-related tasks. To ease this burden, participants recommended a return to monthly Withholding Tax filings and greater automation through digital systems such as iTax and eTIMS.