Page 47 - SACCOStar Mag Vol 46 Press_txt.pdf
P. 47
LOCAL NEWS ROUNDUP
COOPERATIVE MEMBERS PROTEST TAX SACCOS DECRY HURDLES TO AFFORDABLE
ON DIVIDENDS > HOUSING >
Members of the cooperative movement in Embu County Savings and credit co-operatives (SACCOs) have cited high
have raised concern that increasing tax on member interests rates, hidden charges in mortgage schemes and
dividends could hurt SACCOs and the saving culture in HM@CDPT@SD ETMCHMF @R RSTLAKHMF AKNBJR HM SGD QD@KHR@SHNM NE
the country. The co-operators urged the government to SGD@?NQC@AKDGNTRHMFCQD@L
consider lowering tax rate on member dividends. They
accused the government of multiple taxation that drains Kenya Union of Savings and Credit Co-operatives Ltd (KUSCCO)
income thus killing the saving culture and contributes national chairman George Magutu said although the SACCOs
to poverty. have the potential to contribute in the realisation of the low
housing agenda, there are several bottlenecks.
3GD HMBNLD S@W BG@MFDR SG@S SNNJ D?DBS K@RS LNMSG
VHKK RDD S@WDR NM LDLADQ CHUHCDMCR QHRD EQNL ?UD SN “In addition, the cost of property is too high for the low-middle
10 percent as well as withholding tax rate applicable income segment of the population. As a result, majority of
to the dividends payable by a SACCO as an institution. informal sector borrowers are inclined towards incremental
KRA will be taking away 20 percent from the dividends ?M@MBHMF@MCRDKEBNMRSQTBSHNMKN@MRVGHBG@QDL@HMKXOQNUHCDC
of each SACCO member compared to the 10 percent it by co-operative societies,” he said at Pride Inn Paradise Hotel in
previously took. Mombasa during the 4th SACCO leaders’ convention.
Speaking during RAA Elites SACCO Society annual ,Q,@FTSTR@HC@QDBDMSQDONQSNMRDBSNQ@K?M@MBHMFEQNLSGD
general meeting at St. Stephen ACK Kagaari church SACCO Societies Regulatory Authority (SASRA) revealed that
Runyenjes, they complained the government was from the over Sh300 billion borrowed by members in 2016,
punishing people for saving. Led by the SACCO’s vice Sh118 billion (36 percent) was borrowed to fund housing
chair Joel Mugane, they said the government had many projects.
other taxes levied from its citizen and that increasing tax
on dividends was ill informed. “This is an indication of the key role that SACCOs have over the
years played in the provision of housing to their members. With
“The rate of youth enrollment in the SACCO is currently a membership of about 14 million people, the co-operative
at 40 percent. We fear the rate of savings would drop if societies have great potential to bridge the existing housing
the taxes on dividends continue,” he said. Peter Njagi gap,” he added.
a member, said young people were not economically
stable and that their dividends should not be overtaxed. 3GD*42"".BG@HQL@MR@HCSNGDKO@CCQDRRSGDGNTRHMFCD?BHS
in the country, his union had over 14,000 mortgage accounts
Loise Mwende, 23, said following massive training and ?M@MBHMFKNMFSDQLLNQSF@FDRENQBNNODQ@SNQR@MC2 "".RSN
appeal by leaders to form or enroll to existing SACCOs, OTSTOGNTRDR@MCN?BDRQDRODBSHUDKX
youth had heeded to the call but they could stop saving
following the taxation. “We therefore call upon the government to fast-track
investments through facilitative tax regimes and build capacity
They said SACCOs were the only institutions that can in co-operatives.
lend to low income earners at low interests adding that
overtaxing them would kill the sector. “This will enable co-operatives not only produce raw materials
HM SDQLR NE E@QL OQNCTBD ATS @KRN OQNBDRR @MC RDKK ?MHRGDC
Source: https://www.standardmedia.co.ke/business/article/2001314466/ commodities to an ever growing market,” he said.
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