Investment Allowance and Financial Performance of Dt-Saccos in Nairobi County, Kenya

Purpose: The main objective of the study was to determine the effect of investment allowance on financial performance of DT-SACCOS in Nairobi County, Kenya. Methodology: This study utilized explanatory research design to investigate the influence of tax policies, including investment allowances, accelerated depreciation, and capital gains tax exemption, on the financial health of Deposit Taking SACCOs in Nairobi County, Kenya. The study used advanced estimation techniques, such as correlation and panel data regression models to estimate the relationship. Results: The study established that investment allowance has a significant negative impact on the financial performance of deposit-taking savings and credit cooperative societies (DT-SACCOs) in Nairobi County. Conclusion: Investment allowances, despite their negative association with financial performance, offer a valuable opportunity for DT-SACCOS to reduce taxable income and optimize investment in growth-enhancing assets. However, this should be balanced with careful planning to avoid potential adverse effects on financial performance.