34 banks, 2 micro finance institutions accounted for 8% of all taxes collected in 2024

Kenya’s financial sector continues to play a significant role in the economy, with the latest Total Tax Contribution Report showing that 36 players in the sector, comprising 34 banks and two microfinance institutions, contributed 8.09 per cent of all taxes collected between January and December 2024.

The report, released by the Kenya Bankers Association (KBA) in partnership with audit firm PwC, shows that the banking sector contributed a total of Ksh.194.81 billion to the National Treasury in the year ended December 31, 2024.

Of this amount, Ksh.100.12 billion were taxes borne directly by the banks — such as corporate tax — while Ksh.94.69 billion were taxes collected on behalf of the government, including Pay As You Earn (PAYE) and withholding tax.

“Beyond the headline numbers, this year’s report reveals an important trend — the growing significance of people-related taxes. We have seen this among both employers and employees. With the full-year implementation of policies like the Affordable Housing Levy, collections by participants surged by 113 percent,” said Peter Ngahu, Regional Senior Partner at PwC.

Alice Muriithi, Tax and Legal Services Partner at PwC, added:
“Another interesting statistic — data published by the Kenya Revenue Authority (KRA) shows that we had slightly over eight million registered taxpayers in 2024. If I divide 36 taxpayers by eight million contributing 8 percent of the total taxes, the message is clear: there is an overreliance on this sector.”

The bankers’ umbrella body has further called for a review of the PAYE tax bands, noting that the current structure has reduced the purchasing power of Kenyans, straining household incomes amid rising living costs.

According to Raimond Molenje, KBA Chief Executive Officer, KRA must explore self-sustaining solutions — including a downward revision of PAYE taxes to give workers more take-home pay and stimulate local economic activity.

“We need to take a bold move and revise downwards the Pay As You Earn brackets across the entire employed workforce. Those tax brackets have contributed to the evaporation of our purchasing power, and we need to reflect if we are to grow our revenue base, create jobs, and improve livelihoods,” said Molenje.

KRA Board Chair Nderitu Muriithi concurred, stating: “We agree with you. We think that where we should be looking — and where we are looking — is not just at those with paychecks. We are also targeting other businesses that exist, including rental income.”

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