Kenya’s banks and microfinance institutions maintained a major influence on the country’s tax revenue in 2024, contributing a total of Sh194.81 billion to the National Treasury.
The latest Total Tax Contribution Report, compiled by the Kenya Bankers Association (KBA) and PwC, shows that 36 financial entities, 34 banks and two microfinance institutions accounted for 8.09 percent of all taxes collected last year.
Of the total, Sh100.12 billion was paid directly by the institutions as corporate taxes, while Sh94.69 billion was collected on behalf of the government, including Pay As You Earn (PAYE) and withholding taxes.
The KBA has also called for a reassessment of PAYE tax brackets, emphasizing that the current system has weakened household purchasing power amid rising costs.
“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 Raimond Molenje, KBA Chief Executive Officer.
KRA Board Chair Nderitu Muriithi agreed with the proposal, adding, “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 also reveals how banks allocated value to key stakeholders.
In 2024, the government received 54.95 percent through taxes, employees earned 25.62 percent in salaries and benefits, while shareholders collected 19.44 percent through dividends.
