X

Morocco's Tax Reforms Yield $29.5 Billion, Fueling Social Programs

Morocco's Tax Reforms Yield $29.5 Billion, Fueling Social Programs
Tuesday 14 - 14:20 Journalists: Dakir Madiha
Zoom

Morocco's comprehensive fiscal reforms have driven remarkable growth in tax revenue, reaching MAD 299 billion ($29.5 billion) in 2024, marking a significant increase from MAD 199 billion ($19.5 billion) in 2020. This surge in revenue has enabled substantial investments in social welfare programs, according to Fouzi Lekjaa, Minister Delegate to the Minister of Economy and Finance.

The additional MAD 100 billion ($9.9 billion) generated has been strategically allocated across various social initiatives, with MAD 44 billion supporting social dialogue, MAD 35 billion directed to financial aid programs, and MAD 19.5 billion covering medical insurance contributions.

Tax collection improvements have been noted across all major categories, with an impressive 11% annual growth rate. Corporate tax revenue increased to MAD 70 billion ($6.9 billion), while VAT collections rose by 59% to reach MAD 89 billion ($8.8 billion). Income tax revenue also saw substantial growth, climbing to MAD 59.6 billion ($5.9 billion), representing a 49% increase.

Looking ahead to 2025, the government has announced significant tax relief measures targeting low and middle-income households. Monthly salaries below MAD 6,000 ($590) will become tax-exempt, while households earning under MAD 15,000 ($1,470) per month will benefit from MAD 8.5 billion in tax relief. Additionally, 86% of public-sector retirees—approximately 165,000 individuals—will receive full income tax exemption.

The government's efforts to simplify tax procedures have shown positive results, particularly through initiatives like the Unified Professional Contribution. Enhanced fiscal controls and broader withholding tax policies have effectively addressed tax evasion, resulting in increased revenue from MAD 14 billion in 2023 to MAD 17.8 billion in 2024.

A voluntary tax compliance program has proven particularly successful, generating MAD 127 billion ($12.5 billion). This includes MAD 77 billion from bank declarations, MAD 48 billion from direct declarations, and MAD 2 billion from foreign-held assets. The tax administration has guaranteed confidentiality for compliant taxpayers, encouraging continued participation in the program.

The reforms are expected to strengthen Morocco's fiscal position, with projections indicating a reduction in the budget deficit to 4% in 2024 and 3% by 2026. Public debt is anticipated to stabilize at 69.5% of GDP, creating a more robust foundation for development and investment opportunities.

The Finance Act's introduction of a 5% tax rate is expected to generate an additional MAD 6 billion in state revenue, representing another step toward building a more structured and transparent economic system that effectively addresses national priorities while working to reduce social and economic disparities.

Add your comment

300 / Remaining characters 300
Publishing conditions : Do not insult the author, people, sanctuaries, attack religions or the divine, avoid racist incitement and insults

Comments (0)

The opinions expressed in the comments reflect only those of their authors and not of Lou.Press

Read more