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Walaw

Economy

Mineral Water Tax Boosts Local Government Revenues

Thursday 20 June 2024 - 07:45

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Recent figures released by the Ministry of Interior have revealed a remarkable surge in revenues from mineral and table water sources, benefiting local authorities. Revenues soared from 170.3 million dirhams in 2022 to an astonishing 803.2 million dirhams in 2023.

According to the Economic, Social and Environmental Council's (CESE) review of the mechanisms for granting licenses and controlling the exploitation of natural resources (water resources and quarries), revenues were 135.2 million dirhams in 2019, 125.1 million dirhams in 2020, and 139.2 million dirhams in 2021.

These figures, reported by the CESE to the Ministry of Interior, highlight a weakness in the collection of royalties related to the exploitation of water resources, with a significant accumulation of outstanding amounts. The information presented underscores that the annual royalties collected by watershed agencies between 2012 and 2017 ranged from 186.62 to 187.86 million dirhams for all categories, amounts deemed insufficient considering the numerous uses of the public hydraulic domain.

Under Law No. 47.06 on the taxation of local authorities, companies exploiting mineral water sources and table waters intended for bottled consumption must pay a tax on these waters. In addition to this tax, which benefits local authorities, there are also royalties provided for by Law No. 36.15 in favor of watershed agencies.

The updated version of Law No. 47.06 stipulates that institutions exploiting mineral water sources or bottled table waters must pay a tax. This tax applies to spring or well waters regulated by the legislation in force concerning their exploitation and sale.

Taxpayers must, before April 1st of each year, submit to the revenue agent a declaration of the number of liters or fractions of liters of mineral waters and table waters intended for bottled consumption. The amount of the tax is paid quarterly to the treasury of the municipal revenue agent before the end of the month following each quarter, based on the number of liters or fractions of liters of mineral or bottled table waters, according to a standard form from the administration.

The government decided to increase the tax on mineral waters and table waters, raising it from 0.10 dirhams to 1 dirham per liter in the 2021 Finance Act.

This surge in revenues from the taxation of mineral and table waters has undoubtedly provided a significant boost to the finances of local authorities. As the demand for bottled waters continues to rise, these revenues are expected to play an increasingly crucial role in supporting local development initiatives and enhancing the quality of services provided to communities across the nation.