Morocco’s tax office uses smart algorithms to chase tax dodgers

Morocco’s tax authority has rolled out new “smart algorithms” to catch tax dodgers, according to sources who spoke to Hespress AR. 

The system scans tax declarations, spots mistakes or contradictions, and then sends out instant messages urging companies and self-employed workers to file corrected statements. This is part of a fast-track procedure allowed under articles 221 and 221 bis of the tax code.

In just the past weeks, hundreds of businesses and freelancers have already received these automatic reminders. 

Most of the flagged issues involve income tax and VAT declarations, with errors in how the taxable base was calculated.

The sudden wave of notifications has left many accountants scrambling. Sources say company accountants and independent professionals are racing against the clock to fix their clients’ declarations within the 30-day deadline that follows receipt of the tax authority’s letters.

Those who fail to comply risk bigger problems. If corrected declarations aren’t filed in time, the tax office can impose its own automatic assessments, adding late fees, fines, and penalties. 

Challenging those decisions later is only possible under strict conditions set out in article 235 of the tax code.

The new system is already producing results. In just the first four months of this year, the tax authority received over 500 requests from businesses trying to make use of the so-called “right to make a mistake” procedure (Droit à l’erreur). 

By doing so, companies aim to avoid heavy late-payment fines, which can climb up to 25%, in addition to financial penalties of 5% plus 0.5% per month. 

However, filing a corrected declaration and paying dues doesn’t exempt them from audits.

Some businesses, after receiving these messages, have turned to chartered accountants for help. 

These businesses are looking to take advantage of options provided by article 221 bis, hoping to avoid the heavy costs of automatic tax audits.

Meanwhile, the corrections are giving the tax authority’s investigations department valuable data on companies that had stayed off the radar for years.