Kenyan banks contributed Ksh194.81 billion in taxes in 2024, representing 8.09% of the government’s total revenue, according to the Total Tax Contribution of the Kenya Banking Sector 2024 report.
The report shows that for every Ksh100 in profit, banks paid Ksh38.50 to the National Treasury — underscoring the sector’s pivotal role in revenue mobilization and national development.
“In 2024, banks significantly contributed to socioeconomic development by paying Ksh194.81 billion in taxes and investing in schools, roads, hospitals, and other services,” the report noted.
Of the total tax contribution, Ksh100.12 billion came directly from banks’ own earnings, while Ksh94.69 billion was collected on behalf of the government.
Corporate tax accounted for the largest share at Ksh69.41 billion, while remittances from the Affordable Housing Levy more than doubled to Ksh3.45 billion.
Banks also shared value with key stakeholders — 25.6% of earnings went to employees, 19.4% to shareholders, and the remainder to public services. On average, each bank spent Ksh 13.5 million on managing tax responsibilities.
The survey covered 32 commercial banks and four microfinance institutions operating in Kenya.
Kenyan Banks Contribute Ksh194.8 Billion to Govt Revenue
In 2024, participating banks collected a total of Ksh94.69 billion in taxes, marking a 7.91% increase from Ksh87.74 billion in 2023.
| Year | Total Tax Contribution (Ksh Billion) |
|---|---|
| 2021 | 129.50 |
| 2022 | 181.27 |
| 2023 | 190.26 |
| 2024 | 194.81 |
The overall rise in tax collections was mainly driven by growth in key categories:
- People Taxes Collected increased by 10.62%, from Ksh31.27 billion in 2023 to Ksh34.59 billion in 2024. This category includes PAYE, employee contributions to the Affordable Housing Levy (AHL), the National Social Security Fund (NSSF), and the Social Health Insurance Fund (SHIF). The growth was largely attributed to the introduction of new taxes such as AHL and SHIF.
- Withholding Tax Collected rose by 16.00%, from Ksh29.28 billion to Ksh33.97 billion, reflecting higher interest payments to depositors and other providers of debt financing.
- Withholding VAT recorded a 5.20% increase, from Ksh2.39 billion to Ksh2.51 billion.
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Decline in Other Taxes
However, some tax categories recorded declines:
- Excise Tax Collected dropped by 4.81%, from Ksh23.81 billion in 2023 to Ksh22.66 billion in 2024, likely due to reduced credit uptake.
- Other Taxes Collected decreased by 3.77%, from Ksh0.99 billion to Ksh0.95 billion.
The sustained growth in People Taxes and Withholding Tax highlights the sector’s vital role as a government collection agent, channeling taxes from employees, suppliers, and capital providers.
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Banks Recommendations
In addition, surveyed banks urged for greater automation through integrated digital platforms, pre-filled returns, and improved iTax functionality.
They also called for clearer, more predictable tax guidelines, particularly regarding the effective use of digital tools such as iTax and eTIMS.
While some institutions acknowledged progress in areas such as auto-populated VAT returns and the stabilization of the iTax system.
At the same time, the use of Alternative Dispute Resolution (ADR) mechanisms to address tax disputes, the prevailing sentiment was that compliance obligations have continued to grow in both complexity and cost.
“While a few acknowledged progresses in areas such as auto-populated VAT returns, stabilization of iTax, and Alternative Dispute Resolution (ADR) mechanisms for resolving tax dispute,” the report read.
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