- More than 60 Saccos have tasked cooperative lobbies with pushing for tax reforms after engaging KRA on sector specific tax challenges.
- The sector wants tax laws aligned with the member based and not for profit Sacco model, saying current rules do not reflect how cooperatives operate.
- The proposals now move to lobbying groups, including KUSCCO, for engagement with the National Treasury and KRA on possible policy changes.
More than 60 Savings and Credit Cooperative Organisations (SACCOs) have asked cooperative lobbies to push for tax reforms that reflect sector realities.
The Saccos engaged the Kenya Revenue Authority (KRA) in discussions aimed at identifying practical tax changes affecting their operations. The dialogue ended with a clear mandate for movement lobbies to push the agreed proposals forward.
Aligning the law with how Saccos operate
What stood out most was the need to align the Income Tax Act and the Cooperative Societies Act with how Saccos actually function. Delegates argued that current tax rules were drafted without adequately accounting for the member based, not for profit nature of Sacco operations.
This mismatch, they said, has created friction between compliance requirements and the practical realities of running a cooperative financial institution. Because Saccos pool member savings and redistribute them as loans, standard corporate tax frameworks do not always apply cleanly to their business model.
A pattern of engagement
This is not the first time the cooperative movement has pushed KRA for reform. The Kenya Union of Savings and Credit Cooperatives (KUSCCO) has repeatedly raised similar concerns in recent months, including in submissions to the National Treasury ahead of the 2026/27 budget, where it urged the removal of excise duty on member transactions.
READ ALSO:
KUSCCO has also convened national taxation dialogues bringing Sacco chief executives, board members and finance teams together with KRA officials to hash out sector specific tax issues. These forums have covered the taxation of Sacco products, multiple taxation, compliance and dispute resolution, and corporate taxation for member based institutions.
Saccos have separately pushed back against enforcement provisions in the Finance Act 2026, warning that expanded KRA powers to freeze accounts during unresolved tax disputes could strain liquidity and disrupt lending. However, the same Act also delivered a rare win for the sector, exempting Saccos from Value Added Tax on the sale of repossessed collateral.
What the reforms could mean
The proposals discussed could have far reaching implications for Sacco taxation, regulatory policy, financial inclusion and the overall cost of doing business in Kenya’s cooperative sector. A more predictable tax framework is seen as essential to supporting Saccos as they expand access to financial services, particularly among low and middle income Kenyans in rural and under served areas.
For now, the mandate rests with movement lobbies such as KUSCCO to carry the proposals forward into formal policy engagement with the National Treasury and KRA.
By Benedict Aoya
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
