Kenya, 25 October 2025 - Kenya’s banking sector delivered a total tax contribution of Sh194.81 billion to the National Treasury in 2024, demonstrating its continued financial strength and central role in government revenue mobilization.
This significant contribution, drawn from 36 participating banks and microfinance institutions, represents 8.09 per cent of the total government revenue for the year. The total figure marks a slight increase of just over 2 per cent compared to 2023, reflecting the sector’s steady recovery and strong financial performance.
The tax contribution, detailed in the latest Kenya Bankers Association (KBA) report, comprised Sh100.12 billion in Direct Taxes (paid by banks) and Sh94.69 billion in Indirect Taxes (collected on behalf of the government).
However, a key highlight was identified: While Corporate Tax remained the largest single component at Sh69.41 billion, it saw a nearly 5 per cent decline. This drop was largely mitigated by a steep increase in people-related taxes. The collections from the Affordable Housing Levy (AHL), for instance, more than doubled to Sh3.45 billion, marking a staggering 113 per cent surge due to its full-year implementation.
The sector's heavy fiscal responsibility is starkly evident in its Total Tax Rate (TTR): for every Sh100 in profit, banks paid Sh38.50 to the government.
In addition, employee-related taxes surged, driven by highly skilled salaries and legislative changes. PAYE collections rose to Sh31.77 billion, accounting for over 91 per cent of staff-related taxes, a trend accelerated by the July 2023 revision of the top PAYE rate to 35 per cent.
New contribution structures also led to sharp rises in statutory deductions:
- National Social Security Fund (NSSF) collections jumped by 76.88 per cent.
- Social Health Insurance Fund (SHIF) contributions increased by 41.45 per cent.
According to the report, Withholding Tax collections grew by 16 per cent, due to higher deposit volumes and rising interest rates, while Excise Duty dropped slightly due to lower credit uptake.
KBA Chief Executive Officer Raimond Molenje acknowledged the sector's critical contribution, stating that banks are major contributors to the government’s coffers. He, however, stressed that efforts must now be made to boost the broader economy.
"As we reflect on tax matters, we must also focus on how to revive purchasing power and enhance production within the economy," Molenje said, highlighting the need for sustained economic growth beyond revenue generation.
The report stated that the government received the largest share (54.95 per cent) through taxes, followed by employees (25.62 per cent) and shareholders (19.44 per cent).
