State Introduces New Levy on SACCOs

Saccos members will now pay a new tax on their non-withdrawable deposits, which are the share capital they cannot reduce or withdraw. This is a move by the government to raise more money to fund the operations of the Sacco regulator, Sasra.

Sasra has issued a schedule that shows that all saccos that are registered under the 2020 regulations for non-deposit taking business will pay a different annual fee for the next four years, starting from January 1, 2024.

The annual fee, called the Annual Sacco Societies Levy, will start at 0.10 percent of the non-withdrawable deposits in 2024, and then increase to 0.13 percent in 2025, 0.14 percent in 2026, and 0.15 percent in 2027.

“The fee paid under subparagraph (1) will be based on the total non-withdrawable deposits held by the Sacco society as shown by the audited financial statements of the Sacco society for the previous financial year,” said Sasra chairman Jack Ranguma and CEO Peter Njuguna.

The officials also said that the maximum fee payable will not go beyond six million shillings.

According to the latest data from the State Department of Co-operatives, the non-withdrawable deposit-taking (NWDT) savings reached Ksh.97.86 billion by June 2023, which was more than the target of Ksh.91 billion.

“Target achieved due to improved member confidence, branch expansion, and adoption of alternative service delivery channels by regulated Saccos,” Sasra said.

Based on the NWDT savings of Ksh.97.86 billion as of June 2023, Sasra would collect an extra Ksh.97.86 million from the 0.10 percent fee rate set for 2024.

Using the same NWDT savings of Ksh.97.86 billion as of June 2023, Sasra would get Ksh.127.2 million from the 0.13 percent fee rate set for 2025.

The revenue collection would go up to Ksh.146.79 million in 2027, using the same NWDT savings of Ksh.97.86 billion as of June 2023 and charged at a 0.15 percent rate set for that year.

The revenue collection would rise to Ksh.1146.79 million in 2027 going by the same base NWDT collection of Ksh.97.86 billion as of June 2023 and deducted at a 0.15 percent rate set for that year.