Last month, the Government of Uganda proposed a tax on Savings and Credit Cooperative Organizations (SACCOs). This suggestion was not well received, mostly because SACCOs play a very important role in bringing groups of people together to save money that can contribute to meeting their needs thus transforming their lives and whole communities. Additionally, a year had not passed since the decision was made to exempt SACCOs from taxes for at least 10 years. In an effort to give citizens a platform to safely express their views on this proposal, Forum for Women in Democracy (FOWODE) recently organized a community dialogue in Mityana District. The community dialogue aimed to document the community’s views on the proposed tax bill as well as sensitize the community on the tax bill and its likely effect on SACCOs.
From the dialogue, it was quite clear that the community members strongly opposed the bill. They argued that the income tax on SACCOs could potentially discourage citizens from coming together to save due to the increased rates on loans that would result from the tax. Those present at the dialogue proposed that instead of imposing taxes on SACCOs, the government should increase taxes or impose taxes on alcohol, betting companies, cigarettes and any other products that discourage the youth from staying in school and taking their education seriously.
As a result of the community dialogue, there was enhanced awareness on the proposed tax on SACCOs and increased knowledge on the importance of SACCOs. Community members were able to brainstorm on the effects this tax could have on SACCOs as well as the other ways the government could generate income without taxing SACCOs.
Last week, Parliament rejected the proposed corporation tax on SACCOs.