Moroccan Government orders sweeping audit of local tax exemptions

Moroccan Government orders sweeping audit of local tax exemptions
Tuesday 15 April 2025 - 13:34

Morocco’s Ministry of Interior has ordered regional inspections into local tax exemptions amid growing concerns over financial irregularities involving municipal leaders, Hespress AR has learned.

According to well-placed government sources, the General Inspectorate of Territorial Administration has directed regional offices to audit municipal records, specifically focusing on exemptions granted for taxes on undeveloped urban land and subdivision fees. The move follows allegations that questionable exemptions signed by local officials have led to significant financial discrepancies and legal disputes.

Inspectors have been instructed to review ongoing court cases between taxpayers and local governments, particularly over tax bills for undeveloped urban plots. In many cases, taxpayers have presented exemption certificates signed by municipal presidents, claiming agricultural use of their land. These claims often contradict zoning changes confirmed by urban planning agencies, which reclassified the land as residential or industrial years ago.

Despite these changes, some local governments continued issuing exemption certificates, leading to legal and financial confusion. When taxpayers are later required to settle back taxes in order to complete land sales, many have taken their cases to court, seeking compensation for financial losses.

Auditors will compare joint committee inspection reports—used to justify exemptions—with updated data from the General Treasury and urban agencies. The aim is to identify discrepancies between local exemption records and national tax collection databases.

The investigation follows the government’s recent approval of Bill No. 14.20, which amends the law governing local taxation. The bill significantly raises the tax rate on undeveloped land, with the minimum now set at 10 dirhams per square meter, up from 4, and the maximum rising to 30 dirhams, from 12.

The new legislation also restores the General Directorate of Taxes as the official body responsible for issuing and collecting housing and community service taxes, alongside the business tax, which is already under its authority.

Regional inspectors will also examine how municipalities manage their tax bases, citing delays in updating technical information on land properties and inefficiencies in processing tax exemption requests.

Officials say legal disputes over these taxes have risen sharply in recent years, pointing to deeper structural issues in how local governments impose and collect levies.

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