The Kenya Banking Sector delivered a massive Ksh. 194.81 billion to the National Treasury in the year ended December 31, 2024. This is according to the latest Total Tax Contribution of the Kenya Banking Sector – 2024 Report.
Released by the Kenya Bankers Association (KBA) in collaboration with PwC Kenya, the report reveals that this tax figure from just 36 participating banks and microfinance institutions accounted for 8.09% of all government tax receipts for the period. This concentration underscores the significant reliance on a small pool of highly compliant taxpayers within the Kenyan economy.
The sector’s Total Tax Contribution (TTC) is divided into two categories:
| Category | Amount (Ksh. Billion) | Description |
| Taxes Borne | 100.12 | Direct costs to the banks (e.g., Corporate Tax) |
| Taxes Collected | 94.69 | Taxes collected on behalf of the government (e.g., PAYE, Withholding Tax) |
| Total Tax Contribution | 194.81 |
A notable trend highlighted in the report is the shifting nature of the tax burden:
- Corporate Tax remained the single largest component at Ksh. 69.41 billion, representing 35.63% of the TTC. However, it saw a 4.98% decline compared to 2023.
- The decline in corporate tax was partially offset by a massive surge in people-related taxes, primarily driven by the full-year implementation of the Affordable Housing Levy (AHL). Collections from the banking sector for the AHL more than doubled, surging by 113% to Ksh. 3.45 billion.
The report also introduces the Total Tax Rate (TTR), a measure of taxes paid per Ksh. 100 of profit:
- For every Ksh. 100 of profit made by the participating banks, Ksh. 38.50 was paid to the government as taxes in 2024.
- This TTR figure represents a decrease from 46.77% in 2023, driven mainly by increased bank profitability.
In terms of value distribution, the government received the largest share of the value created by the banking sector in 2024:
- Government (via Taxes): 54.95%
- Employees (via Salaries & Benefits): 25.62%
- Shareholders (via Dividends): 19.44%
Finally, the report addresses the administrative burden faced by banks, noting that they dedicate an average of three full-time employees to tax-related tasks, costing about Ksh. 13.5 million per bank each year. To ease this, banks suggested administrative simplifications, such as reverting to monthly Withholding Tax filings and enhancing the automation of tax platforms like iTax and eTIMS.