NAIROBI, Kenya — Members of Savings and Credit Cooperative Organisations (SACCOs) could soon benefit from significant tax relief if proposals submitted to the National Treasury by the Kenya Union of Savings and Credit Co-operatives (KUSCCO) are adopted in the 2026/2027 national budget.
In submissions presented on Thursday, March 19, KUSCCO urged the Treasury to scrap excise duty on SACCO member-based transactions, arguing that the tax unfairly increases the cost of accessing cooperative financial services.
“Today, KUSCCO, acting on behalf of the SACCO movement, appeared before the Treasury to present and defend sector proposals for the 2026/2027 national budget,” the union said in a statement, describing the engagement as a key moment for the sector to influence fiscal policy.
The proposed removal of excise duty would directly lower the cost of saving, withdrawing, and borrowing within SACCOs—institutions that primarily serve low- and middle-income earners. KUSCCO maintains that internal SACCO transactions should not attract taxes, as they are member-driven and not profit-oriented in the same way as commercial banking services.
Sector players argue that eliminating the levy would allow members to retain more of their income, strengthening household financial stability and boosting savings culture across the country.
Beyond transaction taxes, KUSCCO also proposed adjustments to individual income tax bands to ease pressure on taxpayers and increase disposable income. The move, it says, would indirectly benefit SACCOs by enhancing members’ capacity to save and invest.
KUSCCO further called for an expanded definition of “designated primary cooperative societies” to include both individuals and corporate entities. The proposal aims to widen participation in the cooperative movement and position SACCOs more competitively against commercial banks and other financial institutions.
The cooperative sector remains a key component of Kenya’s financial ecosystem, mobilizing billions in savings and providing affordable credit to millions of members. However, stakeholders have long argued that the current tax framework undermines its growth potential.
The submissions were developed with technical support from PwC, which assisted in refining the proposals to align with fiscal policy considerations.
