The Kenya Union of Savings and Credit Co-operatives (KUSCCO) has submitted proposals to the National Treasury for removing excise duty on SACCO member transactions. The move aims to cut financial service costs for members, many of low- and middle-income. Other suggestions include adjusting income tax bands and broadening cooperative society definitions.
The Kenya Union of Savings and Credit Co-operatives (KUSCCO) presented its proposals to the National Treasury on Thursday, March 19. A key recommendation is eliminating excise duty on internal SACCO transactions, which the union says imposes an unnecessary burden on many low- and middle-income members. Removing this duty is expected to lower costs for saving, withdrawing, and borrowing within SACCOs, thereby enhancing members' financial well-being. KUSCCO stated, “During the submissions, we emphasised that the proposals are grounded in the real challenges faced by SACCOs and urged the National Treasury to adopt them to ease the tax burden on SACCOs.” Another proposal calls for adjusting individual income tax bands to raise disposable income and encourage savings and investments in SACCOs. The union also suggested defining 'designated primary cooperative societies' to encompass groups of individuals and corporates, aiming to boost participation in the cooperative sector and improve competitiveness against banks. The submissions received technical support from audit firm PwC. If approved, these measures could bring tax relief, better financial access, and a stronger cooperative sector for SACCO members.
