The Savings and Credit Cooperative Union League of Tanzania (SCCULT) Capacity Building Officer, Mr Florian Haule, told the ‘Daily News’ in Dar es Salaam that the percentage was too high for Saccos which have to a large extent been service oriented.
Mr Haule who is also the Chairman of the Steering Committee of International Credit Union Day (ICUD) week which reached its climax yesterday with various exhibitions at Mnazi Mmoja grounds in Dar es Salaam said that the tax was threatening the growth of the saccos.
“Government should reduce taxes charged on Saccos because we are more of the service oriented than business when compared to big financial institutions such as banks. The tax which is charged at 30 per cent on the Saccos’ per capital income is too much to afford,” he said.
Mr Haule noted that during the weeklong exhibitions, there was a symposium held on Wednesday where members proposed that the tax should at least go down to 10 per cent. “Having 30 per cent of tax in place will jeopardize the growth and sustainability of Saccos and will make them agents of banks whereby they borrow monies from the bank and shift all the burden of interest to members,” he said.
He added that the contribution of Saccos has been significant in the growth of the country’s economy and in creation of jobs. One of the exhibitors, Ms Victoria Masika who is the Manager of Bunju Saccos Ltd said that with the current tax, it was too hard to operate sustainably.
“The bad thing with the current formula of the taxation is that authorities are interested in the revenue we have been making per annum not putting into consideration that Saccos also have various running costs,” she said. The Deputy Minister for Finance, Ms Saada Mkuya Salum said that the matter needs to be discussed with other stakeholders as it was being implemented according to the law.
“The government will not charge tax if the accounts of a particular Saccos shows that there was no profit made in the course of the year,” she said. She called on Saccos to invest in capacity building in accountancy, financial control and customer services as a way of insuring sustainability.