“I want every Ugandan to belong to a financial institution of some sort. This business of keeping money under the mattress should stop. SACCOs are the nearest (to what) many people in villages have to financial institutions,” he explained.
Finance Minister Matia Kasaija has explained why Savings and Credit Cooperative Organization (SACCOs) have been exempted from paying tax on their incomes effective July 1—for ten years.
“I want every Ugandan to belong to a financial institution of some sort. This business of keeping money under the mattress should stop. SACCOs are the nearest (to what) many people in villages have as financial institutions,” he explained.
Speaking at a post 2017/18 budget dialogue organized by the Uganda Revenue Authority on Monday in Kampala, Kasaija said with more Ugandans keeping their money in formal settings, the economy will benefit in the long run.
“When you keep money under the bed, it is not available for multiplication. I want money to come to financial institutions so it is used for increased productive work.”
He also revealed that SACCO leaders petitioned his ministry to have the taxes on their cooperatives dropped.
In the budget that was presented to the nation last week, SACCOs were exempted from paying taxes on their incomes until June 30, 2027.
In the recent past, SACCOs have sprung up across the country, as many Ugandans bid to secure their futures through savings. To tap into the growing popularity of these cooperatives, some banks have rolled out products to partner with them.
Some SACCOs have grown so big that they handle money with hundred millions and billions of shillings.
However, if a SACCO employs staff, to whom a salary is paid, that salary is subject to taxation.