Morocco cracks down on tax dodgers while protecting small businesses

Morocco is introducing a new approach to address the informal economy by dividing it into two categories: “structural” and “subsistence.” 

The aim of this approach is to strengthen tax control over businesses generating significant profits without paying taxes while ensuring that small-scale activities are not unfairly impacted.  

The first category includes businesses that earn substantial revenues but do not contribute to state resources, causing financial losses to the public treasury. 

The second category consists of small traders and self-employed workers whose income is limited and who are not deliberately evading taxes. 

Authorities will focus on monitoring large-scale informal businesses while avoiding excessive pressure on smaller economic activities that support many families.  

During a recent press conference on tax measures in the 2025 Finance Law, Younes Idrissi Kaitouni, Director General of the General Directorate of Taxes, said that using modern technology, such as data analysis and banking records, is important for identifying informal businesses with large financial flows. 

Kaitouni said that the goal isn’t to make life harder for vulnerable people but to ensure fairness. Suddenly increasing tax pressure on small businesses could lead to social unrest, so the plan is to introduce changes gradually.

Sectors like construction, trade, and imports—where cash transactions dominate and tax records are often unclear—will be closely monitored. 

However, officials recognize that harsh tax measures could force businesses to shut down and lead to job losses. 

To avoid this, the government is rolling out incentives to encourage informal businesses to register and pay taxes voluntarily without hurting their operations.

Kaitouni made it clear that businesses earning more than 5, 6, or even 10 million dirhams a year can’t claim to be “small operations.” They benefit from public services and infrastructure but don’t contribute to tax revenues, making them a priority for audits and corrective measures. 

Meanwhile, truly small businesses with low income won’t face strict crackdowns since their tax contributions wouldn’t outweigh the potential harm of forcing them to close.

Tax expert Mounir El Mestari backed this plan, saying it ensures fair taxation by focusing on large-scale tax evaders instead of small businesses. 

He told Hespress Ar that some businesses make big money while avoiding taxes, creating a financial gap that affects public services. 

Expanding the tax base fairly means using smart tools like banking and transaction tracking to identify who should be paying more.