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Government introduces new tax on Kenyans’ savings effective January

Ruto administration introduces tax on Kenyans’ savings in a new push to fund the Sacco Societies Regulatory Authority (SASRA). 

 The Sacco Societies Regulatory Authority targets non-withdrawable deposits, which typically require an account holder to leave the funds untouched for a specified period. 

Starting from January 1, 2024, all Savings and Credit Cooperative Societies (SACCOs) registered under the Sacco Societies (Non-Deposit Taking Business) Regulations of 2020 will be required to pay a modified annual levy until December 31, 2027. 

The Annual Sacco Societies Levy will be paid at 0.1% of the non-withdrawable deposits between January 1 and December 31, 2024. 

It will then be increased gradually to 0.13% in 2025, 0.14% in 2026, and 0.15% in 2027. 

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“The levy paid under subparagraph (1) shall be based on the total non-withdrawable deposits held by the Sacco society as indicated by the audited financial statements of the Sacco society for the immediately preceding financial year,” SASRA chair Jack Ranguma and chief executive officer Peter Njuguna stated, as reported by Business Daily. 

SASRA clarified that the levy shall not exceed KSh 6 million. What’s the value of Sacco savings? The value of savings in Saccos crossed the KSh 1 trillion mark last year for the first time. 

This came despite economic challenges that led some savers to withdraw funds for daily needs. 

“Target achieved as a result of improved member confidence and access to financial services through the adoption of digital channels by Saccos,” the Ministry of Cooperatives stated. 

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