Kenyan banks paid KSh 205.58bn in taxes in 2025, up 5.53%, with withholding tax up 29.4%, KBA report says

Kenyan banks paid KSh 205.58 billion in taxes in 2025, up 5.53% from KSh 194.81 billion in 2024, according to the Total Tax Contribution Report that the Kenya Bankers Association (KBA) released in Nairobi on 22 October 2026. PwC Kenya prepared the report with KBA. It puts the banking sector's payments at about 8% of total government receipts, and the institutions covered hold 96.9% of the sector's net assets.

At the Central Bank of Kenya rate of KSh 129.89 to the US dollar posted on 23 October 2026, the total is about US$1.58 billion.

Of the total, KSh 98.36 billion was tax the institutions bore themselves and KSh 107.22 billion was tax they collected on the government's behalf. The Star, which called the total a record and the first above KSh 200 billion, reported on 23 October that collections rose 13.24% while taxes borne fell 1.77%. The report was launched at the Serena Hotel in Nairobi, The Standard reported.

Withholding tax collected by the banks rose 29.40% to KSh 43.95 billion. It is the largest category of tax the banks collected for the government, and the second-largest component of the total after corporate tax. Withholding tax on professional fees rose 292% and on royalties 159%. The Star attributes the withholding tax rise partly to the Tax Laws (Amendment) Act, 2024, which widened the definition of royalties, and the professional-fee rise to banks' spending on core banking system upgrades.

People taxes collected by the banks, which are employment-related taxes, rose 6.40% to KSh 36.81 billion. Excise duty collected rose 5.46% to KSh 23.90 billion.

Corporate tax borne by the banks rose 2.06%, from KSh 69.41 billion to KSh 70.84 billion. That is 22.15% of all corporate tax the government collected, the report says. Profit before tax grew 17.63% over the year, and the report attributes the modest corporate tax growth partly to banks' investment in tax-exempt government securities.

Compliance costs also rose. The average annual cost per institution climbed 62.25%, from KSh 19.10 million to KSh 30.99 million, of which KSh 20.22 million went to external tax consultants. Institutions spent an average of 103 business hours a month on tax compliance and made about 45 tax payments a month.

Since 2018 the sector's total tax contribution has risen 107.66% from KSh 99 billion. Over the same period its net assets grew 89.42% to KSh 8.35 trillion.

John Mbadi, Cabinet Secretary for the National Treasury and Economic Planning, said at the launch that the Treasury will continue to engage stakeholders on reforms to improve the coherence of tax legislation, according to KBA's release. He said sustained revenue mobilisation also depends on "the prudent use of public resources and confidence in the management of public finances".

KBA chief executive Raimond Molenje said the contribution was delivered within "an increasingly demanding tax compliance environment", as quoted by The Star. The association wants a return to monthly withholding tax filing and payment, and the report cites reconciliation challenges on digital platforms such as iTax and eTIMS.

Alice Muriithi, a tax and legal services partner at PwC Kenya, called for collaboration among policymakers, revenue authorities and taxpayers to simplify reporting, improve digital tax platforms and create a more predictable tax environment. KBA's recommendations to government include continued investment in automation, integrated tax systems, predictable tax legislation and practical filing and payment requirements.