Kenyan banks contributed Sh194.81 billion in taxes in 2024

The Kenya Banking Sector contributed a total of Sh194.81 billion to the National Treasury in the year ended 31 December 2024.

This was revealed in the 2024 Total Tax Contribution of the Kenya Banking Sector Report released by the Kenya Bankers Association (KBA) in collaboration with PwC Kenya.

According to the report, the Total Tax Contribution (TTC) from 36 participating banks and microfinance institutions represented 8.09 percent of all government tax receipts for the period.

The funds comprised Sh100.12 billion in taxes borne, direct costs to the banks such as Corporate Tax, and Sh94.69 billion in taxes collected on behalf of the government, such as Pay As You Earn (PAYE) and Withholding Tax.

The report highlighted the shifting nature of the tax burden. While Corporate Tax remained the single largest component at Sh69.41 billion, it declined by 4.98 percent compared to 2023.

This was partly offset by a significant rise in people-related taxes, driven by the full-year implementation of the Affordable Housing Levy, which saw collections from the banking sector more than double to Sh3.45 billion, representing a 113 percent growth.

Notably, for every Sh100 of profit made by the participating banks, Sh38.50 was paid to the government as taxes, a measure known as the Total Tax Rate (TTR). The trend represents a decrease from 46.77 percent in 2023, primarily driven by an increase in bank profitability.

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“The Sh194.81 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. The banks’ voluntary participation also reflects a strong commitment to transparency and responsible governance,” said KBA Chief Executive Officer, Raimond Molenje.

In terms of how banks distribute value to their key stakeholders, the government received the largest portion at 54.95 percent via taxes in 2024, followed by employees at 25.62 percent through salaries and benefits, and shareholders at 19.44 percent through dividends.

The report notes that banks incur significant administrative costs, with an average of three full-time employees dedicated to tax-related tasks, costing about Sh13.5 million per bank each year.

Participants suggested reducing this burden by returning to monthly Withholding Tax filings and increasing automation using platforms such as iTax and eTIMS.