Price Water House Coopers (PwC) and Kenya Bankers Association (KBA) have today released the 2022 Total Tax Contribution (TTC) report of the Kenya Banking Sector.
The report offers an opportunity for the Total Tax Contribution of the banking sector to be quantified and analyzed in order to facilitate data driven discussions and engagements with policy makers and regulators.
The National Treasury and Economic Planning Cabinet Secretary Prof. Njuguna Ndung’u said that the tax contribution report is aligned to a greater global focus on tax transparency and sustainability.
In a speech read on his behalf by National Treasury and Economic Planning Economist Mr. Dennis Olila, Ndung’u said that the banking sector has started to harness the potential of the market segments previously deemed risky including Micro, Small and Medium Enterprises (MSMES) space, which is made possible by providing customer-centric products.
“The sector’s efforts and investments in product innovation and risk management are laudable for enhancing variability and flexibility while serving MSME needs which includes provision of expert advice on financial management, insurance, investments and other financial solutions to MSMEs,” Ndung’u said.
The CS added that technological advancement in the banking sector has given MSMEs the power to choose fit-for-purpose financial products.
Ndung’u said that the government is at the fore-front of championing access to credit by MSMEs which is evident in the recent introduction of the Hustler Fund aimed at enhancing financial inclusion by providing access to credit at low interest rates for micro, small and medium sized enterprises (MSMEs) in Kenya.
According to Ndung’u, the Credit Guarantee Scheme (CGS) implemented by the government has been a vital initiative in supporting credit access to MSMEs.
“The CGS provides a de-risking product to enable banks to lend to MSMEs that would otherwise not access credit. Seven (7) banks are participating in the initial phase and efforts are underway to further revamp the CGS for greater and sustainable impact in the economy,” he added.
Also speaking at the event, KBA Chief Executive Officer (CEO), Dr. Habil Olaka stated that the financial services sector plays an important role in supporting economic growth.
Olaka maintained that the banking industry remains committed to sustain efforts towards anchoring business growth despite geo-political challenges and various adverse effects both in the global and domestic macroeconomic environment.
“This report continues to demonstrate high levels of transparency and compliance among banks, which highlights sound corporate governance. There is no doubt that the TTC also underlines the industry’s collective commitment to transparency and tax compliance. As an industry we are, therefore, happy that our members are at the forefront of tax transparency and compliance in the corporate sector,” he remarked.
At the same time, PwC Kenya’s Country Senior Partner and Regional Senior Partner, Eastern Africa, Mr. Peter Ngahu stated that the report provides valuable insight into how TTC of the banks grew by 39.94 percent in 2022 relative to 2021.
This, he said, was despite a challenging environment characterized by increased inflation, prolonged drought, depreciation of the Kenyan shilling against major currencies, geopolitical tensions arising from the Russia-Ukraine conflict, and election-related uncertainties.
By Peace Muthoka
