A total of 2,012 Savings and Credit Cooperative Organisations (SACCOs) across the country have petitioned Parliament, saying government’s proposal to impose a 30 per cent tax on them will stifle their growth.
Under their umbrella body, the Uganda Cooperative Savings and Credit Union Limited, the SACCOs accuse government of going against its decision to exempt them from the tax for 10 years.
Appearing before Parliament’s Finance Committee on Wednesday, they argued that the new tax will chase away their members as it will lead to change in loan terms.
“SACCOs have already made long term commitments including borrowing or lending to members with the assumption that the larger cash-flows resulting from tax exemption will enable them fulfill their obligations,” the petition reads in part.
Led by their chairperson, Mr Sylvester Ndiroramukama, they listed the number of taxes they already pay as Pay as You Earn, Local Service Tax, Withholding Tax and Operational Tax, arguing that adding another tax will suffocate them.
The tax on SACCOs is contained in a raft of bills presented by State minister of Finance David Bahati in Parliament on Tuesday from which government expects to collect approximately 769.5 billion shillings.
The bills include The Income Tax (Amendment) Bill, The Value Added Tax (Amendment) Bill, The Excise Duty (Amendment) Bill and The Tax Procedures Code.
Others are (Amendment) Bill, Gaming (Amendment) Bill, Stamps Duty (Amendments) Bill, Tax Appeals Tribunal (Amendment) Bill and Traffic & Road Safety (Amendment) Bill.
The initiatives come after an observation by government that in the 2016/17 financial year, Uganda Revenue Authority collected Shs13 trillion, which is less than half of the national budget of Shs29 trillion.