Tax evasion crackdown: Moroccan authorities refer offenders to prosecution

Moroccan tax authorities have referred several tax evasion cases involving fraudulent invoices and VAT manipulation to public prosecutors in cities including Casablanca, Rabat, Oujda, and Tangier. The cases, which bypassed the National Tax Dispute Committee, involve company executives and business owners accused of engaging in criminal tax offenses.

According to Hespress AR sources, tax inspectors relied on Articles 192 and 231 of the General Tax Code to impose criminal penalties on those producing fake invoices to evade tax liabilities. Enhanced digitalization and improved data-sharing channels have allowed tax offices across the country to detect fraudulent practices more effectively. Cross-referencing real-time client and supplier declarations revealed discrepancies, leading to a significant decrease in such cases compared to 2022, when the fraudulent invoice market reached 40 billion dirhams.

The enforcement of provisions in the 2024 Finance Law, which introduced joint liability for corporate managers and business partners involved in VAT fraud, has led to numerous prosecutions. Tax officials identified irregularities in past transactions after analyzing declarations and found taxpayers unable to justify their activities. The introduction of a withholding tax on VAT since July 1, 2024, has further curbed fraud, boosting revenues from one of the state treasury’s primary resources.

The General Directorate of Taxes’ 2024-2028 strategic plan emphasizes promoting tax compliance through equitable tax management, transparency, and the use of advanced technologies, including AI for data analysis. While the initiative has driven taxpayers toward voluntary compliance, it has also placed financial strain on small and very small businesses, raising concerns about the long-term effectiveness of tax collection efforts.

Key measures, such as the requirement for “Tax Clearance Certificates” during invoice processing, have enhanced collection rates. Businesses must now withhold a portion of VAT from suppliers and remit it directly to tax authorities, ensuring reliable VAT payments. This policy has reportedly improved tax revenue performance in the latter half of 2024.