Kenya’s banking sector paid Sh194.8bn in taxes in 2024 – Report

Kenya’s banking sector contributed a total of Sh194.81 billion to the National Treasury in 2024, underscoring the industry’s vital role in the country’s revenue collection, according to a new report by the Kenya Bankers Association (KBA) and PwC Kenya.

The Total Tax Contribution of the Kenya Banking Sector – 2024 Report reveals that the taxes paid and collected by 36 participating banks and microfinance institutions accounted for 8.09% of all government tax receipts for the year ended December 31, 2024.

The findings highlight Kenya’s continued reliance on a small pool of highly compliant corporate taxpayers.

“The Sh194.81 billion tax contribution by 36 participating banks in 2024 highlights the sector’s central role in Kenya’s revenue mobilisation,” said KBA Chief Executive Officer Raimond Molenje.

 “The banks’ voluntary participation also reflects a strong commitment to transparency and responsible governance.”

Of the total, Sh100.12 billion represented taxes borne directly by the banks—such as corporate income tax—while Sh94.69 billion comprised taxes collected on behalf of the government, including Pay As You Earn (PAYE) and Withholding Tax.

Corporate Tax remained the single largest tax component, amounting to Sh69.41 billion, or 35.63% of the total tax contribution.

However, it registered a 4.98% decline from 2023, a trend attributed to shifting profit dynamics and evolving fiscal policies.

At the same time, people-related taxes rose sharply due to the full-year implementation of the Affordable Housing Levy (AHL).

Collections from the banking sector under the levy more than doubled, surging 113% to KSh 3.45 billion.

The report also shows that for every Sh100 in profit, banks paid KSh 38.50 in taxes—known as the Total Tax Rate (TTR). This represents a drop from 46.77% in 2023, mainly because of increased profitability across the sector.

Few Taxpayers

PwC Kenya Country and Regional Senior Partner for Eastern Africa, Peter Ngahu, noted that the findings reflect both the fiscal weight and economic responsibility of the banking industry.

“This 8.09% 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 said. “This data informs the essential dialogue around tax policy needed to ensure the sector remains robust.”

The study also examined how banks distribute value among key stakeholders.

 In 2024, the government received the largest share at 54.95% through taxes, followed by employees at 25.62% via salaries and benefits, and shareholders at 19.44% through dividends.

However, banks continue to face a heavy administrative burden in managing tax obligations.

On average, each bank employs three full-time staff dedicated to tax-related tasks, at a cost of approximately Sh13.5 million per bank annually.

To ease compliance, the report recommends returning to monthly Withholding Tax filings and enhancing automation through platforms such as iTax and eTIMS.

The annual report provides policymakers with valuable insights into how Kenya’s financial institutions contribute to national revenue and highlights the need for a more balanced tax system that sustains growth while maintaining fiscal stability.