The banking sector contributed Sh194.81 billion to the National Treasury in 2024, according to a new report by the Kenya Bankers Association (KBA) and PwC Kenya.
The figure accounted for 8.09 percent of total government tax revenues, underscoring the sector’s central role in Kenya’s fiscal ecosystem.
The Total Tax Contribution of the Kenya Banking Sector – 2024 Report analyzed data from 36 commercial banks and microfinance institutions. It revealed that the industry remains one of Kenya’s most compliant and significant taxpayers, with a large share of government revenue derived from a small group of institutions.
Of the total Sh194.81 billion, Sh100.12 billion represented taxes borne directly by banks including Corporate Tax while Sh94.69 billion came from taxes collected on behalf of the government such as Pay As You Earn (PAYE) and Withholding Tax.
Corporate Tax remained the single largest contributor at Sh69.41 billion, or 35.6 percent of the total. However, it dropped by 4.98 percent compared to 2023. The decline was partly offset by higher people-related taxes following the full implementation of the Affordable Housing Levy (AHL), which rose by 113 percent to Sh3.45 billion.
KBA Chief Executive Officer Raimond Molenje said the findings highlight the banking industry’s strategic role in revenue mobilization and policy planning.
“The Sh194.81 billion tax contribution by 36 participating banks highlights the sector’s central role in Kenya’s revenue mobilisation. This data provides valuable insights for policymakers as they consider how to balance fiscal sustainability with sector resilience,” Molenje said.
PwC Kenya Country and Regional Senior Partner for Eastern Africa, Peter Ngahu, said the concentration of tax contributions from a few large players signals the need for balanced policy reforms.
“This 8.09 percent 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,” Ngahu noted.
The report showed that for every Sh100 of profit made by participating banks, Sh8.50 was paid to the government as tax, a Total Tax Rate (TTR) that declined from 46.77 percent in 2023. The drop reflects higher bank profitability in 2024, supported by digital growth, lower loan defaults, and regional expansion.
In 2024, the government received the largest share of banks’ value distribution at 54.95 percent through taxes. Employees followed at 25.62 percent via salaries and benefits, while shareholders received 19.44 percent in dividends.
The report also noted high administrative costs related to tax compliance. On average, each bank employed three full-time staff for tax matters, costing approximately Sh13.5 million annually. Participants recommended simplifying compliance by reinstating monthly Withholding Tax filings and enhancing automation through platforms such as iTax and eTIMS.
