By Spy Uganda
Current and former Members of Parliament (MPs), along with Parliamentary staff, will now enjoy tax exemptions on earnings from the Uganda Parliamentary SACCO, following an appeal made by the Wazalendo SACCO, operated by the Uganda People’s Defence Forces (UPDF).
The appeal contested the Uganda Revenue Authority’s (URA) decision to impose withholding taxes on SACCO business earnings.
Robert Migadde, Chairperson of the Uganda Parliamentary SACCO, made the announcement during the SACCO’s Annual General Meeting (AGM).
Migadde revealed that over UGX514 million, previously withheld from MPs’ earnings, will be reversed and credited to their accounts.
“You may recall that SACCOs have enjoyed tax waivers for 10 years since 2017, but members’ business earnings were still taxed. Thanks to the appeal by Wazalendo and the Attorney General’s interpretation, members’ earnings are now tax-exempt, effective retroactively from 2017,” Migadde said.
In May 2017, Parliament successfully opposed a government proposal to impose corporation tax on Savings and Credit Cooperative Organizations (SACCOs). The government had proposed the amendment, aiming to generate UGX10 billion annually by taxing profitable SACCOs.
However, MPs argued that exempting SACCOs would promote financial inclusion, leading to a ten-year tax waiver for these entities. Migadde clarified that the interpretation of the law now means that the withholding tax on MPs’ earnings is no longer applicable.
“Our SACCO withheld UGX514 million from members’ earnings as of June 2023. The SACCO board has decided to return this money to members’ accounts, effective June 30, 2024.” This update comes after the Ministry of Finance revealed that UGX638.6 billion in taxes was forgone in five years due to tax exemptions for MPs’ emoluments.
The 2024 Tax Expenditure Report by the Ministry also highlighted other exempted groups, including the judiciary, UPDF, police, and other public servants, while the general workforce pays up to 15% in Pay As You Earn (PAYE) taxes.
During the AGM, Migadde revealed that loans totaling UGX412.37 million, owed by three deceased members—including former Speaker Jacob Oulanyah (UGX294.918 million), Rehema Wetangola (UGX3.093 million), and Patrick Okabe (UGX123.361 million)—have been written off in accordance with the Co-operative Statutes. He explained that the SACCO now follows a formal process to settle outstanding loans by offsetting them against the deceased members’ shares and credit balances.
The SACCO’s financial report indicated growth in approved loans, which rose to UGX34.557 billion as of June 2024, and fixed savings, which increased to UGX36.453 billion. Chief Executive Officer Mureebe Muhanuka also announced plans to enhance security at one of the SACCO’s real estate projects by establishing a police post in Kitukute-Bulindo.
