SACCOs Ask for Tax Relief as Cash Runs Low

SACCOs Ask for Tax Relief as Cash Runs Low | Money Market Hub Kenya

SACCOs Ask for Tax Relief as Cash Runs Low

Many Kenyans ask: Why are some SACCOs struggling even though members are saving regularly?

SACCOs (savings and loan groups) are asking the Treasury for help. They say current tax rules make it hard to give loans and manage their money.

From what I’ve seen, this is creating a cash squeeze for many SACCOs in Nairobi, Kisumu, and other towns.

Who This Affects

  • Individual SACCO members
  • Companies or groups that join SACCOs
  • Teachers, small traders, and workers who rely on SACCO loans

The Problem

  • SACCOs that allow both individuals and companies to join pay higher taxes than those with only individual members.
  • Extra taxes reduce money for loans and operations.
  • Internal SACCO fees are also taxed, making management more expensive.

What SACCOs Are Asking For

  1. Fair tax rules for all SACCOs, no matter who joins.
  2. Exemptions on interest earned by members, so savings grow faster.
  3. Lower taxes on SACCO fees, keeping more money available for loans.

Example:

  • A teacher saving KES 5,000 every month could get better returns if SACCOs retain more cash.
  • A boda boda rider saving KES 500 daily could get loans faster.

Why It Matters

  • Many SACCOs have less cash than needed because loans grow faster than deposits.
  • High taxes make SACCOs less willing to grow or accept more members.
  • Without relief, members may struggle to get loans or higher savings returns.

Government Response

Treasury has received SACCO proposals at the end of 2025. Lawmakers may change rules, making it easier for SACCOs to serve members.

Related Insights from Money Market Hub

Pros and Cons of Tax Changes

Good ThingsPossible Problems
SACCOs will have more money for loansGovernment may get less tax revenue
Encourages SACCOs to growSome SACCOs might misuse relief
Members may get higher returnsRules must be clear to avoid loopholes

Bottom Line

SACCOs want tax relief to continue helping members. If approved, members could see better loans and higher savings returns. Tax rules affect everyday savings and borrowing in Kenya.

Many Kenyans don’t realize SACCO structure affects taxes — this matters when choosing where to save or borrow.

Take Action

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About the Author

Postine Ngeli is a Kenyan investment education blogger focused on money market funds, NSE shares, chamas, and personal investing strategies. He writes to make finance simple, practical, and actionable for beginners and experienced investors alike.

Disclaimer

This content is for educational purposes only and is not financial advice. Always consult a qualified financial advisor before making investment decisions.

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