Nairobi, Feb. 2 -- Prime Bank has fended off a Sh87.6 million claim from the Kenya Revenue Authority (KRA) after the Tax Appeals Tribunal overturned the taxman's claim on the lender's income streams.

The claim followed the taxman's audit of the bank's books four years ago.

The ruling provides crucial clarity on the taxation of banks, particularly concerning excise duty and withholding tax on various income streams.

In its decision, the tribunal barred the imposition of excise duty on credit card interest, late payment interest and over-limit charges, ruling that these constitute interest income rather than taxable fees.

Additionally, it dismissed KRA's attempt to tax cheque and bill discounting income, affirming that such earnings fal...