The proposal to re-introduce tax on Savings and Credit Cooperative Societies (SACCOs) has been rejected by Members of Parliament.<\/p>\n
The legislators overwhelmingly supported the report of the Finance Committee presented on the Income Tax (Amendment) Bill, 2018 presented by the Chairperson, Hon Henry Musasizi on Thursday, 24 May 2018.
\nThe Committee observed that the Income Tax (Amendment) Act, 2017 exempted SACCOs from income tax for 10 years. The committee therefore, recommended that government should conduct a study on the effect of exemption of taxes on SACCOs before re-introducing the law.
\n\u201cThe Bill proposes to introduce the tax before assessing the effect of the exemption. No study has been made to enable the committee to make an informed decision on the re-introduction of the tax,\u201d said Musasizi.
\nThe Speaker of Parliament, Rebecca Kadaga, expressed concern saying that, MPs spent over two hours debating taxation of SACCOs in the last financial year.
\n\u201cI am surprised that this tax is back. Minister, what is happening?\u201d Kadaga inquired.
\nHon Silas Aogon (Independent, Kumi Municipality) argued that it is not reasonable to change the law within a year.
\n\u201cThe people who are suffering are the ones in the villages. The SACCOs are trying to lift our people from poverty. Taxing SACCOs is unacceptable,\u201d said Aogon.
\nHon Jalia Bintu (NRM, Masindi District) said that a year is not enough for government to conclude that SACCOs should be taxed.
\n\u201cIn any case, SACCOs are indirectly paying taxes. They pay operational licences, Local Service Tax as well as Withholding Tax,\u201d said Bintu.
\nHon Henry Kibalya (NRM, Bugabula South) said that government has an obligation to promote a saving culture among its citizens and this can largely be done through SACCOs.
\n\u201cThe current law says that after thorough assessment, SACCOs can either be taxed or not. The word \u2018thorough assessment\u2019 should be removed so that SACCOs are never taxed,\u201d said Kibalya.
\nHon Santa Alum (UPC, Oyam District) said that banks are discriminatory in nature because majority are in urban centres while SACCOs are in rural areas.
\n\u201cThe law on exempting SACCOs from taxes was enacted just a year ago and we have not yet determined that SACCOs are making profit to tax them,\u201d said Alum.
\nHon Herbert Ariko (FDC, Soroti Municipality) noted that majority of Ugandans have been keeping money informally and the emergence of SACCOs is promoting formal savings.
\nHon Odonga Otto (FDC, Aruu County) however, differed saying that taxes are targeted at SACCOs that are making huge profit.
\n\u201cThere are some SACCOs like Wazalendo which are bigger than banks and this could be the reason as to why the Ministry of Finance based its decision to tax SACCOs,\u201d said Otto.
\nHon Pentagon Kamusiime (NRM, Butemba County) said that exemption of SACCOs from taxes should not be promoted at the expense of the growth of the formal banking sector.
\n\u201cGovernment can give SACCOs time to mature but they should eventually be taxed so that they can compete favourably with the banks,\u201d said Kamusiime.<\/p>\n
Source: Parliamentary News<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The proposal to re-introduce tax on Savings and Credit Cooperative Societies (SACCOs) has been rejected by Members of Parliament. The legislators overwhelmingly supported the report of the Finance Committee presented on the Income Tax (Amendment) Bill, 2018 presented by the Chairperson, Hon Henry Musasizi on Thursday, 24 May 2018. The Committee observed that the Income […]<\/p>\n","protected":false},"author":27983,"featured_media":2925,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_paywall_metabox":[],"jnews_override_counter":[],"footnotes":""},"categories":[101],"tags":[14,195],"class_list":["post-4148","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-business","tag-business-news"],"yoast_head":"\n