Non-remittance of sacco dues could land employers in jail

In Summary

• They will take culprits to court for failing to remit deductions to saccos.

• The movement said there is approximately Sh2 billion that has not been remitted.

Dan Marube, CEO of Co-operatives Alliance of Kenya and MD of KUSCCO George Ototo during the Co-operative leaders' consultative town hall meeting in Nairobi on 7th May 2019
Dan Marube, CEO of Co-operatives Alliance of Kenya and MD of KUSCCO George Ototo during the Co-operative leaders' consultative town hall meeting in Nairobi on 7th May 2019
Image: ELIZABETH KIVUVA

Employers will face jail terms if they fail to remit members' deductions to Saccos.

Co-operatives Alliance of Kenya CEO Daniel Marube said the co-operative societies have been facing financial strain as parastatals, university Saccos, businesses and individual-owned co-operatives fail to remit employees' deductions over time.

The movement said there is approximately Sh2 billion that has not been remitted.

"The consequences of members defaulting on loans are dire, yet administering same laws on non-remittance has been difficult," Marube said.

The co-operatives' umbrella body said it will strengthen the tribunal and take culprits to court.

Marube was speaking at a town hall meeting to confirm recommendations to remove discriminative details contained on the newly published draft National Cooperatives Organisation by the ministry.

“The policy further proposes the restructuring and strengthening of the existing government agencies including Sacco Societies Regulatory Authority (SASRA) and the Tribunal,” the draft statement stated.

agreed to reinstate the non-remittance clause in the final policy.

They strongly objected the establishment of the Co-operatives Development Fund calling it another cash cow. The idea behind the fund is for the national government to inject initial capital, incorporate the cooperatives and facilitate research.

"Directors do not understand how the fund will be run. We feel that we will be taxed for the money to go to the fund," Jogoo Sacco director Odinyo Onyango said.