NCBA faces $3 million tax setback after court ruling

NCBA Group, the Nairobi-based lender backed by some of Kenya’s wealthiest families, including the Kenyattas, the Ndegwas and the Meralis, has suffered a major setback in its effort to preserve a stamp duty waiver tied to the 2019 merger of NIC Bank and Commercial Bank of Africa.

The latest ruling clears the way for the Kenya Revenue Authority to demand payment and raises new questions about how previous stamp duty exemptions were issued.

A merger, a waiver, and a constitutional challenge

The High Court last week dismissed NCBA’s request to halt enforcement of a judgment that struck down its Ksh384.5 million ($3 million) exemption. Justice Chacha Mwita said issuing a stay would conflict with constitutional rules on public finance and noted that NCBA had not shown it would face irreparable harm by paying the duty while pursuing an appeal.

The dispute dates back to June 2019, when the National Treasury issued a legal notice exempting the merger instruments from stamp duty. Officials argued the relief would help stabilise the banking sector after several lenders collapsed.

But Senator Okiya Omtatah challenged the waiver, saying the Treasury sidestepped Parliament and violated the Constitution, the Public Finance Management Act and the Stamp Duty Act. In April 2025, the High Court agreed, calling the exemption “unconstitutional and illegal” and faulting the Treasury for issuing the concession without demonstrating a clear public benefit.

NCBA’s widening legal and public finance pressures

NCBA later sought a suspension of the ruling, insisting the exemption was properly granted and that the merger helped shore up confidence in the sector. Treasury supported that view.

Without a stay, KRA is now free to pursue the Ksh384.5 million, along with any interest due. NCBA can absorb the cost, but the implications for its compliance record and dealings with regulators are more significant than the financial hit itself.

What lies ahead for NCBA

NCBA Group, which also operates in Tanzania, Rwanda, Uganda and Côte d’Ivoire, was created in 2019 through the NIC–CBA tie-up and is partly owned by the Kenyatta, Merali and Ndegwa families. The lender has since expanded its regional presence while maintaining a strong position in Kenya.

The bank’s next stop is the Court of Appeal, where it will seek to overturn the judgment. NCBA is expected to argue that immediate enforcement could unsettle the framework for future mergers, making such deals harder to structure.

Unless the appellate court steps in, NCBA may ultimately have to settle the Ksh384.5 million duty, closing a dispute that has become a larger test of constitutional limits and public accountability in Kenya’s financial system.