Morocco is making steady progress in reducing its tax expenditures, according to a report by Germany’s Institute for Development and Sustainability (IDOS) in partnership with the Council for Economic Policies (CEP).
Even with this progress, experts say more work is needed to improve transparency and understand how tax breaks actually impact the country’s economy and society.
The report looked closely at special tax measures included in Morocco’s finance laws. In 2023, tax expenditures amounted to MAD 35.4 billion, around 2.4% of the country’s GDP. This is down from 2.9% the year before.
The government plans to cut these expenses even further in 2024 to MAD 32.1 billion, about 2.1% of GDP, mainly by canceling 24 measures tied to value-added tax (VAT).
Those changes alone reduced VAT-related spending by over 28%.
Transparency remains a sticking point. Morocco scored 55.7 out of 100 on the Global Tax Expenditures Transparency Index, ranking 28th out of 105 countries.
While government reports on tax spending are publicly available, the information isn’t always clear or easy to use.
The report suggests simplifying how this data is presented so citizens and researchers can better track where money is going.
One of the biggest hurdles, the study says, is the complexity of Morocco’s tax system.
Today, there are 251 special measures scattered across taxes on income, companies, and VAT. This makes it hard to figure out which exemptions are truly useful and which just drain public finances without much benefit.
The report also echoed concerns previously raised by Morocco’s Court of Accounts. There’s still no clear institutional framework to evaluate whether these tax breaks are worth keeping, and there’s a lack of solid studies on their economic and social impact.
The report recommends speeding up reforms and adopting clear, transparent standards for introducing or ending tax exemptions. According to the authors, this will help advance sustainable development and promote fair taxation.
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