Taxation of SACCOs and other forms of Cooperatives
At National level, UCA has been a lead actor in the campaign for the waiver of tax arrears and Tax exemption on SACCOs. Working with other stakeholders and partners, UCA was able to influence debate and discussions around the issue of taxation of SACCOs. UCA also held and facilitated several engagements involving leaders and managers of SACCOs across the country and members of Parliament on the committee on Trade, Industry and Cooperatives as well as Finance committee of parliament to ensure SACCOs are exempt from Taxes to enable them deliver affordable financial services to their Members. Because of our advocacy efforts, the Parliament of the republic of Uganda unanimously approved amendments to the Income tax act in the current National Budget granting Tax exemption on SACCOs for a period of 10 years effective 2017. This sets precedence in the History of UCA and gives a big relief to the SACCO fraternity. SACCOs are advised to take advantage of this tax relief for their growth and sustainability in addition to providing affordable financial services to their Members.
UCA is still engaging the government through different ministries, the parliament and other stakeholders lobbying them to grant tax exemption to other forms of Cooperatives like for SACCOs in order to create better Cooperative linkages and synergies. Given the nature of Cooperative business, their membership and impact on communities, cooperatives should be granted tax exemptions to be able to serve their members especially the small holder citizens if Uganda is to achieve the middle income status by 2020 and for realization of vision 2040.
Tier 4 Microfinance institutions and Money lenders act 2016
UCA is an interested party regarding the close supervision and regulation of tier four Microfinance institutions including SACCOs. SACCOs provide financial services to their members and hence need close monitoring and supervision to safeguard members’ deposits and ensure sustainable growth. However, their supervision and regulation should not distort their Cooperative identity, ideology and should observe the international Cooperative principles and values. Any distortion of either of these shall have negative consequences on SACCO in Uganda. UCA an Umbrella organization for Cooperatives together with other stakeholders was actively involved in the formulation of tier four Microfinance institutions and money lenders Act 2016. UCA and Cooperatives that participated in these meetings raised important issues to be incorporated in the law but instead were ignored by the drafters of this law. Cooperators went ahead and organized a meeting at UCA conference room in the presence of the parliamentary committee etc. The ministry of finance was invited but never attended nor communicated. During this meeting, Cooperators raised a number of issues to be included in the bill before presentation to parliament for approval.
These issues were submitted to the ministry of finance by UCA but instead were ignored and the ministry went ahead presented the bill to the parliament of the republic of Uganda and later to His Excellency the president and assented to. The current law therefore puts SACCOs in a tight corner regarding their operations among other things. UCA has written to the permanent secretary Ministry of finance regarding these issues but have not yet received any feedback. The ministry of finance team has invited stakeholders to finalize drafting of regulations for the tier four microfinance institutions and money lenders Act 2016.
Starting of the Cooperative Bank
UCA has played a significant role in the revival and re-establishment of the Cooperative Bank in Uganda. Last year on the 28th day of June 2016, UCA took lead in the presentation of 10 point petition to the Rt. Hon. Speaker of parliament. Among the ten points was a request to government to avail Cooperators a liquidation report of the defunct Cooperative Bank to enable Cooperators understand the fate of their Bank, learn from the previous mistakes as they plan to start the Cooperative Bank. UCA has written and sent a reminder to the speaker of parliament regarding the same matter. UCA in partnership with other stakeholders and partners have organized meetings and a committee set up to conduct a study on the process and requirements of starting the Cooperative Bank.
The Cooperative Amendment bill 2016
UCA organized and facilitated consultation meetings both at National and regional level to gather issues of the Cooperators to enrich the cooperative amendment bill that is now before parliament of Uganda. Lobby mapping and stakeholder analysis was widely done by UCA team where several meetings were conducted with many stakeholders including a meeting with the Chairperson of the parliamentary committee on Trade, Industry and cooperatives. Regional consultation meetings were held in different regions of the country and one National consultation meeting that was held in Kampala at the UCA headquarters. Through all the consultation meetings, UCA was able to gather issues of Cooperators regarding the Cooperative amendment bill before presenting it to the Parliament of the republic of Uganda. We are optimistic that the parliament will consider these issues to enable it pass a law that will empower the cooperatives and Cooperators for their growth and sustainability.
National Budget Advocacy
UCA has been part of the National Budget process 2017/2018 in partnership with other stakeholders including the Civil Society Budget Advocacy Group (CSBAG), USAID Feed the Future Enabling Environment Activity (EEA), Food Rights Alliance, NUCAFE among others. UCA is now a member of CSBAG and will continue to use this platform to strengthen budget advocacy in favor of farmers and cooperatives since the majority of cooperatives are producer/agricultural based. The main thrust of our budget advocacy work this year was on increased financing for agriculture and more specifically strengthening Agriculture extension. Indeed government through the budget in FY 2017/2018 has allocated funding for recruitment of more extension staff. There is also emphasis on organized farmers and groups and UCA will take advantage of this move to mobilize and strengthen the cooperative movement.