By Staff Reporter.
A planned increase in Sacco levy for Deposit-Taking Saccos that run FOSAs has been withdrawn.Sacco Societies Regulatory Authority (SASRA) withdrew plans to increase the Sacco levy from the current 0.1 per cent to 0.125 per cent and progressively to 0.175 per cent at the end of three years.
But it was withdrawn by SASRA Chief Executive Officer, John Mwaka (pictured) to allow for more consultation and agreed modalities of implementation.
This new levy was to be paid based on deposits held in any Deposit-Taking Sacco Society that operates a FOSA, at the rate of 0.125 per cent of the Total Deposits
as indicated in the last audited financial statements, subject to a maximum of Sh 10 million per annum,effective from 31st December,2016.
The decision by SASRA to increasethe Sacco levy is informed by dwindling financial support from the Exchequer to fund its budget and operations.
Figures indicate that funding from the State to SASRA which is a parastatal has been declining for the past six years.
For instance, budget allocation from the Government to SASRA declined from Sh113 million in the 2013/14 financial year to Sh86 million in 2015/16 period.
During this period, SASRA has seen its budget deficit widen from Sh12.6 million in 2013/14 to Sh23.1 million in 2014/15 to Sh48 million in the 2015/16 financial year.
SASRA now has to go back to the Exchequer or source for alternative funding to enable it implement several projects and programmes, including increasing
its surveillance on DT Saccos through a risk-based supervision framework.
The three year window that Treasury uses to fund agencies has already closed.
Sigh of relief as SASRA shelves Sacco levy
