Effects Of Tax Incentives On Financial Performance Of Savings And Credit Cooperative Societies In Nairobi County

Abstract

The purpose of this study was to establish the effects of tax incentives on financial performance of SACCOs in Nairobi County. The study adopted a descriptive research design. The study population comprised of all the registered SACCOs in Nairobi County. A sample of 41 SACCOs was determined using 10- 30% of target population as representative rule and stratified random sampling technique. Secondary data from SASRA was collected and analyzed to establish the association between tax incentives and profitability of SACCOs. This study established that there is a weak positive relationship between capital allowance, accelerated depreciation and financial performance of SACCOs in Nairobi County. It further indicated a negative relationship between tax and financial performance. The study therefore recommended that the government should provide more and a diversity of tax incentives to the SACCOs, especially capital allowance and accelerated depreciation and tax exemptions, since an increase in each of them increases the profitability of SACCOs.