Kenya MPs seek new law to exempt Saccos from taxation

By JAMES ANYANZWA

The Parliamentary Committee on Finance, Planning and Trade will introduce amendments to the Customs and Excise Act in order to exempt services offered by Savings and Cooperative Societies (Saccos) from taxation.

Chairman Benjamin Langat on Tuesday said the co-operative movement is a critical sector of the economy whose growth needs to be nurtured and protected.

“We are here to make laws and amend laws if they are not reasonable. We can always revise them,” he said. He said the committee is going to look at the issues on excise tax, which have been raised by the members from the cooperative movement.

 “It is a process but now we have heard and we are going to do further consultation and move very fast. We want to support the Saccos,” said Langat who is also the MP for Ainamoi in Kericho County.

He said the two parliamentary committees—Finance, Planning, Trade and Agriculture, Livestock and Cooperatives— would work together to ensure the amendments are brought to the floor of the House and passed.

He was speaking to reporters after attending Saccos’ consultative forum with select MPs in Nairobi yesterday.

Domestic savings

Cooperatives mobilise domestic savings to the tune of Sh400 billion accounting for 33 per cent of the national savings and are major drivers of the economy.

They are also expected play a key role towards the realisation of Vision 2030. In an amendment to the Customs and Excise Act through the Finance Bill 2013, Cabinet Secretary Henry Rotich introduced 10 per cent excise tax on money transfers in an effort to finance growing government expenditure with the expected revenue shortfall in the next financial year (2013/2014) pegged at Sh330 billion. The prime targets included money transfer services offered by commercial banks, mobile phone operators, Savings and Credit Co-operative Societies (Saccos), Microfinance Institutions (MFIs) and the Post Office Savings Bank.