President Museveni has agreed to extend the income tax exemption for Savings and Credit Cooperative Organisations (Saccos) and ordered the Bank of Uganda (BoU) to halt directives and threats targeting Saccos that have not applied for central bank licences.
The guidance followed high-level engagements held on January 29, 2026, involving leaders of the Uganda Cooperative Savings and Credit Union (UCSCU), the Uganda Cooperative Alliance, the Speaker of Parliament, and later the President.
In a statement issued by UCSCU, the discussions centred on two long-standing issues affecting the cooperative sector: taxation and regulation.
On taxation, President Museveni agreed that Saccos should not be subjected to income tax and backed an extension of the tax exemption first granted in 2017. The current exemption is set to expire on June 30, 2027.
Sector leaders have consistently warned that taxing Saccos would weaken their capacity to mobilise savings and provide affordable credit, especially to rural and peri-urban communities that remain underserved by commercial banks.
On regulation, the President guided that the Bank of Uganda should stop issuing directives aimed at closing Saccos that have declined to seek central bank licences.
He emphasised that BoU’s role should be limited to oversight of money flows within Saccos, rather than imposing regulatory requirements that do not recognise their cooperative model.
Museveni further directed that a stakeholders’ meeting be convened, chaired by Speaker of Parliament Anita Among, to develop a fair, harmonised and enabling regulatory framework for the Saccos sector.
According to UCSCU, the President’s position reaffirms government commitment to strengthening financial inclusion and protecting community-based cooperative institutions that serve millions of Ugandans.
The Union thanked President Museveni, Speaker Anita Among, the Uganda Cooperative Alliance and other sector stakeholders for sustained engagement in advancing the cooperative agenda.
Saccos across the country were urged to remain calm, maintain professional conduct and await further guidance from UCSCU.
