SACCO leaders applaud Museveni’s pledge to extend tax holiday
Herbert Ahimbisibwe, General Manager of Shuuku SACCO, outlined specific plans for the funds that would have otherwise gone to taxes
MBARARA CITY, February 3, 2026 – Leaders of Savings and Credit Cooperative Organisations [SACCOs] in Western Uganda have expressed relief and renewed focus on development following President Yoweri Museveni’s pledge to extend income tax holiday for the sector.
Government had previously issued a 10-year income tax exemption for SACCOs starting in 2017, which was slated to expire on June 30, 2027. However, during a recent meeting with SACCO leaders regarding the regulation of large SACCOs by the Bank of Uganda [BoU], Museveni halted directives that threatened to penalise SACCOs for not complying with the law requiring them to acquire a trading licence from BoU.
During the meeting Museveni guided that BoJU should maintain an oversight role regarding the flow of money without taking full regulatory control, citing the unique nature of the SACCOs. Crucially, he announced that the tax exemption would be extended beyond 2027 to further bolster the cooperative movement in the country.
A boost for the cooperative sector
Geoffrey Baingana, the former Chairperson of the Banyankole Kweterana Co-operative Union, described Museveni’s decision as a reflection of his own identity as a cooperator.
“What is good remains good for everyone; His Excellency [Museveni] is a cooperator,” Baingana noted. “This directive provides a clear path forward for the movement, removing the confusion caused by overlapping regulations.”
For Caroline Karungi, Manager of Kakoba Mbarara SACCO, the extension is an opportunity to strengthen institutional bonds. “The first priority is to strengthen the bond of cooperatives for future collaborations,” she said.
Similarly, Benon Kamugisha, Credit Supervisor at Mushanga SACCO, noted that the news brings a sense of relief regarding the “regulation gap,” stating that the tax savings would be reinvested to help the SACCO reach new heights.
Strategic reinvestment
Herbert Ahimbisibwe, General Manager of Shuuku SACCO, outlined specific plans for the funds that would have otherwise gone to taxes. “Members’ training will be a priority, alongside consistent asset acquisition year after year,” he explained.
Other cooperative leaders like Jimmy Muhoozi Muheebwa echoed these sentiments, noting that the exemption allows for increased capacity building.
“We are feeling good. We can pursue any of the various options of utilising the opportunity. Any option chosen should base on capacity to catalyze SACCO growth,” he said.
Since the initial exemption in 2017, many SACCOs have reported significant growth, including infrastructure development, and the acquisition of vehicles and IT tools to improve service delivery.
A note of caution
Despite the excitement, some technical experts have advised patience. Amon Mutabarura, the Rwampara District Commercial Officer warned cooperators against “celebrating too early” before a formal policy guideline is issued.
“Let us wait for a policy tool from the Ministry of Finance. We must watch the space, as things can sometimes appear differently on paper than they are said verbally,” Mutabarura cautioned.
In the meantime, members are appealing to apex bodies like Uganda Cooperative Savings and Credit Union [UCSCU] and government to expedite a planned stakeholders’ meeting, to be chaired by the Speaker of Parliament. The meeting aims to harmonise and define a fair regulatory environment for the sector, as previously guided by President Museveni.
As of early 2026, BoU had begun licensing large SACCOs with savings exceeding Shs 1.5 billion, and institutional capital of above Shs 50 million, shifting them from the Association of Microfinance Institutions of Uganda [AMFIU] to BoU supervision.
EBO Cooperative Savings and Credit Society in Bwizibwera Town Board, Mbarara district was the first to receive this licence, with others like Kyazanga-Kwegatta SACCO in Kyazanga Town Council, Lwengo district and MADFA SACCO in Masindi district also transitioning. These three SACCOs are now regulated under the Microfinance Deposit-Taking Institutions Act, 2022.
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