News

SACCOs Petition Parliament over New Imposed Tax

Uganda Cooperatives Savings and Credit Union Ltd (UCSCU) have petitioned the parliamentary finance committee opposing the reinstating of taxes on SACCOs barely a year after a motion for their exemption was passed.

A cooperation tax of 30% has been proposed by the Ministry of Finance for the Financial Year 2018/19, and is awaiting approval from Parliament.

The SACCO heads argued before the committee that the proposed tax is viewed as a double taxation since SACCOs already pay a number of taxes including Pay as You Earn, local service tax, income tax, withholding tax, operation tax among others.

The union fears the new tax will discourage the public from saving and that this could affect the growth of cooperatives.

“SACCOs have restricted funding sources and any practice that drives members away from them would be disastrous; members start SACCOs using income which is already taxed, therefore taxing SACCOs is another form of double taxation,” noted UCSCU Chief Executive Officer, Sylvester Ndiroramukama.

Ndiroramukama said if the exemption of SAACOs from tax is upheld, it will continue to motivate members of the public to save with SACCOs and generally the financial system will be boosted as they will be raising more revenue.

He further argued that the SACCOS have no capital flight and repatriation of profits as it is the case with foreign controlled financial institutions, and other entities which are granted tax holidays.

The state minister for finance in charge of planning David Bahati yesterday justified the proposed tax on SACCOs saying they have identified SACCOs that have accumulated wealth mentioning the Kwagalana SACCO and that such cannot just be left to operate without tax.

Loading...

The committee is currently holding public hearings on the proposed taxes by government and will later make a report that shall be discussed by the whole house to either effect changes or maintain the proposed taxes.

Tags
Back to top button
Translate »

Adblock Detected

Please consider supporting us by disabling your ad blocker