33 banks contribute 8% of Kenyan Gov’t revenue: Report

The banking sector has hit an all-time high in its tax contribution, accounting for Ksh.205.58 billion in taxes collected in 2025.

Speaking during the release of the seventh edition of the total tax contribution report by the Kenya Bankers Association (KBA), the sector's umbrella body noted that the participating banks contributed 22.15 per cent of the total corporate tax collected by the government in 2025.

The contribution to the country's tax revenue by the banking sector saw a 5.53 per cent, crossing the Ksh.200 billion mark for the first time from Ksh.194.81 billion posted by the sector in 2024.

The contribution comprises Ksh.98.36 billion in taxes borne and Ksh.107.22 billion in taxes collected on behalf of government.

The growth now means that of all the taxes collected in the country, 33 banks accounted for 8 per cent, with the sector accounting for nearly a quarter (22.15 per cent) of the total government corporate tax receipts in 2025. The sector is now calling in the government to review taxes on income to spur economic activities.

KBA CEO Raimond Molenje said: “We are not purely seeking to have money back in the pocket; what we are looking for is trust. Kenyans are looking to the government to trust them to build this economy because we tend to look outside for building our economy, yet we can generate and build our economy.”

Alice Muriithi, Partner, Tax and Legal Services, PwC Kenya added: “The taxes that grow much faster are the agency or the consumption taxes. If you think about it, for me to pay my PAYE, KRA does not rely on me to do a self-declaration; they rely on my employer to do that, and that’s an example of an agency tax that will continue to grow to the extent that our economy continues to be largely informal.”

Despite the growth in contributions by the financial sector, the data points to a growing concern of an over-reliance by the government on the regulated sector and an issue that tax experts now warn burdens the financial sector by increasing the cost of compliance. They are further calling for the streamlining of excise duty to allow flexible compliance.

“First, the number of employees that we have to engage just to be able to ensure that we are meeting the compliance standards as far as taxes are concerned. Approximately each and every bank has two full-time employees across the board; from tier 3 banks to now in tier one banks, that number may rise even to 6 full-time staff who are just dedicated to matters tax,” noted Molenje,

Treasury Cabinet Secretary John Mbadi underscored the need to streamline tax policy, noting that the review in Pay As You Earn (PAYE) for those earning up to 32,000 is only the start.

“The government recognises the pressure on households' disposable income and the importance of fair personal income taxes. Consideration of PAYE reforms must balance improving household welfare with the need to finance essential public services,” said CS Mbadi.