Taxation of income generated by Saccos is guided by section 19A of the Income Tax Act, Cap 470.It is however important to note that there are other taxes also applicable to Saccos which are guided by other Acts such as the VAT Act, the Excise Duty Act etc.

In the case of a designated co-operative society, other than a designated primary society, which is registered and carries on the business as a credit and savings co-operative society, chargeable income for the year shall be its income for the year after deducting aggregate bonuses and dividends declared and distributed to the members during the year